Dow Drops 308 Points as Stocks Continue Slide

Strong report on jobs market raises worries that high interest rates are staying
By Newser Editors and Wire Services
Posted Aug 30, 2022 4:02 PM CDT
Stocks Deepen August Slide
Pedestrians walk past the New York Stock Exchange.   (AP Photo/John Minchillo, File)

Stocks fell again on Wall Street, posting their third loss in a row as traders worry that high interest rates are here to stay for a while. The S&P 500 fell 44.45 points, or 1.1%, bringing its loss in the past three days to 5.1%. The benchmark index is down 3.5% for the month with one day left in August. The Dow Jones Industrial Average dropped 308.12 points, or 1%, while the Nasdaq composite lost 134.53 points, or 1.1%. Smaller company stocks also fell, dragging the Russell 2000 1.5% lower. Best Buy was a bright spot, gaining 1.6% after reporting results for its latest quarter that were much better than analysts were expecting.

Technology stocks were a big weight on the market. Chipmaker Nvidia fell 2.1%. Energy stocks fell along with US crude oil prices, which dropped 5.5% to settle at $91.64 a barrel. Chevron dropped 2.4%. Markets have been weaker since Federal Reserve Chairman Jerome Powell indicated Friday that the central bank will stick to its strategy of raising interest rates to try and tame the hottest inflation in four decades. The latest wave of selling reflects a "hangover" from Powell's speech last week and uncertainty ahead of the Labor Department's monthly employment report on Friday, says Megan Horneman, chief investment officer at Verdence Capital Advisors.

A strong report on the job market Tuesday morning further diminished any hopes that the Fed would be able to ease up on its inflation-fighting policy. The higher rates the Fed is imposing are meant to keep inflation in check by slowing down the economy, including the pace of hiring. The government reported that there were were 11.2 million open jobs on the last day of July. That's nearly two jobs for every unemployed person, on average. That number was up from 11 million in June, and June’s figure was also revised sharply higher. "Employers will have to increase their incentives to fill jobs, which could be inflationary," says Sam Stovall, chief investment strategist at CFRA. (Read more stock market stories.)

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