U.S. stocks continue to fall as inflation remains

Publish date: 2024-08-28

NEW YORK (AP) — Stocks fell in morning trading on Wall Street Tuesday, extending a losing streak into a holiday-shortened week.

The S&P 500 fell 0.5 percent as of 10:29 a.m. Eastern. The benchmark index is coming off its third losing week in a row. Markets in the U.S. were closed on Monday for the Labor Day holiday.

The Dow Jones Industrial Average fell 136 points, or 0.4 percent, to 31,182 and the Nasdaq fell 1 percent.

Retailers and technology companies led the losses. Chipmaker Nvidia fell 1.4 percent and Amazon fell 1.7 percent.

Bed Bath & Beyond fell 15 percent following the death of its chief financial officer. The company has been suffering from a prolonged sales slump and executive turnover.

The company that wants to take Trump Media public, Digital World Acquisition, plunged 18.5 percent following reports it didn’t receive enough shareholder support for an extension to close the deal.

ADT jumped 11.7 percent after State Farm said it was taking a 15 percent stake in the home security company.

Trading began Tuesday at the New York Stock Exchange after Ukrainian President Volodymyr Zelenskyy virtually rang the opening bell. He gave a pitch for a program to attract large-scale investments to his country as it continues to battle Russian forces.

Markets have been slipping in recent weeks and shedding much of the gains made in July and early August as inflation remains hot and the Federal Reserve stays on track to continue raising interest rates to try and tame stubbornly persistent high prices. The big concern is that the Fed might go too far in raising rates and slam the brakes too hard on an already slowing economy, potentially causing a recession.

WATCH: Why the Fed plans to keep aggressively fighting inflation even if it leads to job loss

Wall Street has been closely watching economic data for clues that inflation might be easing, which traders hope will give the Fed a reason to ease up on rate hikes. The Fed has already raised interest rates four times this year and is expected to raise short-term rates by another 0.75 percentage points at its next meeting later this month, according to CME Group.

In recent weeks, the market has wiped out much of the gains it made in July and early August as traders worried that the Fed would not let up anytime soon on raising interest rates to bring down the highest inflation in decades. The Fed has made clear that it intends to keep raising interest rates until it is sure that inflation is easing.

Bond yields rose. The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, rose to 3.33 percent from 3.19 percent late Thursday. The two-year Treasury yield, which tends to track expectations for Fed action, rose to 3.52 percent from 3.39 percent.

Markets in Asia were mostly higher. The Shanghai Composite Index rose 1.4 percent after China promised Monday to accelerate easier lending and other policies to shore up economic growth that sank to 2.5 percent over a year earlier in the first half of 2022, less than half the official annual target.

European markets were mostly lower.

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U.S. stocks continue to fall as inflation remains