Magnificent News: Stocks end August with losses | Fed’s Mester sees benchmark rate above 4%

Wednesday, August 31, 2022

Stocks end August with losses | Fed’s Mester sees benchmark rate above 4% | Bernstein’s strategy for internet stocks

WED, AUG 31, 2022

EVENING BRIEF

AS OF WED, AUG 31, 2022 • 04:59 ET

DJIA		31510.43
		-0.88%	-280.44

S&P 500		3955.00
		-0.78%	-31.16

NASDAQ		11816.20
		-0.56%	-66.93

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DOW
NAME	LAST	CHG	%CHG
AAPL	157.22	-1.69	-1.06%
INTC	31.92	-0.34	-1.05%
MMM	124.35	-0.51	-0.41%

S&P 500
NAME	LAST	CHG	%CHG
AAPL	157.22	-1.69	-1.06%
AMD	84.87	-2.07	-2.38%
NVDA	150.94	-3.74	-2.42%

NASDAQ
NAME	LAST	CHG	%CHG
AAPL	157.22	-1.69	-1.06%
AMD	84.87	-2.07	-2.38%
NVDA	150.94	-3.74	-2.42%

EDITOR'S NOTE

Stocks closed lower Wednesday for a fourth consecutive day, finishing August on a downbeat.

The three major averages pushed their monthly losses to more than 4% each. In July, they posted their best month since 2020.

The moves on Wednesday also cut the indexes' gains from their mid-June bottoms. Nevertheless, the Dow Jones Industrial Average is still more than 6% above its summer low, while the S&P 500 and Nasdaq Composite are sitting roughly 8% and 11% from their lowest points.

Jobs data remained in focus as investors continue to look ahead to the big jobs report on Friday that could pave the way for further aggressive rate hikes by the Federal Reserve. On Wednesday, ADP reported weaker-than-expected payrolls data for August and a slowdown in hiring compared to July's gain.

Investors are cautious heading into September, which statistically has proven to be the worst trading month for equities.

It was just earlier this month that investors were predicting the beginning of the next bull run. Then, stocks were building on their July gains, thanks to a combination of bearish sentiment fatigue and corporate and consumer resilience in the face of inflation.

This week, however, markets are digesting newer inflation-fighting comments from the Fed and a spike in the 10-year Treasury yield. This has contributed to declines in stocks. It's a cycle that's likely to continue through the rest of the year, according to Brad McMillan, chief investment officer for Commonwealth Financial Network.

"With inflation showing signs of peaking and with growth slowing, the economy is already responding to higher rates — meaning that fewer hikes in the future may be necessary," he said in a note Wednesday. "When the data changes, so will expectations, and the market will react then as well."