Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023. REUTERS/Brendan McDermid/File Photo Acquire Licensing Rights
NEW YORK, Aug 16 (Reuters) – Wall Street was lower on Wednesday after the release of the Federal Reserve’s minutes showed central bank officials were divided over the need for more interest rate hikes at their last meeting.
At 3:02 pm ET, the S&P 500 (.SPX) was down 15.86 points, or 0.36%, to 4,422 and the Nasdaq Composite (.IXIC) dropped 59.84 points, or 0.44%, to 13,571.21 points and the Dow Jones Industrial Average (.DJI) fell 61.97 points, or 0.18%, to 34,884.42.
“We’ve seen an incredible rally year to date. That’s really bucked all expectations for a bearish reaction to a recession so far this year. A little bit of steam is starting to get let out from that rally,” said Mike Reynolds, vice president of investment strategy at Glenmede.
“Investors are starting to take a more sober look at the economic picture here.”
The minutes, however, showed most policymakers continued to prioritize the battle against inflation.
“I agree with the governors that we’re not convinced that inflation is totally in the rearview mirror,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
“I think the markets will be on pins and needles regarding what the Fed will do all through September and into October.”
Bank shares extended losses, with the S&P 500 bank index (.SPXBK) down 0.9%. Bank of America (BAC.N) fell 1.9%, leading losses among bigger banks.
Target (TGT.N) shares gained 3.3% after the big-box retailer’s second-quarter profit beat estimates, overshadowing its annual forecast cut.
Equities have suffered through a rough patch in August, with the S&P 500 languishing near one-month lows as data underscoring sticky inflation and a robust economy fans fears of interest rates staying elevated for longer.
While investors largely expect the Fed’s monetary tightening to be nearing its end, worries linger the central bank could hold rates at the current level for longer.
Nvidia (NVDA.O) was down 0.12% after gains in the last two sessions, as two more brokerages raised their price targets on the stock ahead of the chip designer’s quarterly results next week.
Declining stocks outnumbered rising ones within the S&P 500 (.AD.SPX) by a 1.9-to-one ratio.
Reporting by Saeed Azhar and Noel Randewich in New York, Amruta Khandekar and Shristi Achar A in Bengaluru; additional reporting by Lewis Krauskopf in New York
Editing by Maju Samuel, Vinay Dwivedi and Deepa Babington
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