HomeBusinessWall St posts third straight quarterly loss as inflation weighs, recession looms

Wall St posts third straight quarterly loss as inflation weighs, recession looms

  • S&P 500 Posts Largest September Percentage Drop in 20 Years
  • All three major US stock indices after three-quarter slump
  • Core inflation data hotter than expected
  • Indices down: Dow 1.71%, S&P 1.51%, Nasdaq 1.51%

NEW YORK, Sept. 30 (Reuters) – The S&P 500 closed the books on Friday with its steepest September drop in two decades, sliding over the finish line of a tumultuous quarter filled with historically high inflation, rising interest rates and fears of a recession.

All three major indices fell to sharp lows after destroying a brief rally early in the session.

The S&P and Dow recorded their third consecutive weekly declines and all three indices posted their second consecutive monthly losses.

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In the first nine months of 2022, Wall Street suffered three consecutive quarterly declines, the longest losing streak for the S&P and Nasdaq since 2008 and the Dow’s longest quarterly decline in seven years.

“It’s another ugly day to close out an ugly quarter in what seems like a really ugly year,” said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. “Investors will look back and realize that this was the year when the Fed pulled a total of 180 percent of their views on inflation and quickly became incredibly aggressive.”

The Federal Reserve has turned the markets upside down by containing its most brutal series of rate hikes in decades to contain stubbornly high inflation, leaving many market participants watching key economic data for signs of an impending recession.

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“The realization that the Fed is doing everything it can to combat 40-year high inflation scares investors that they will push the economy over the edge and into recession,” Detrick added.

The Commerce Department’s Personal Consumption Expenditure (PCE) report did not allay these fears, showing that as consumers continue to spend, the prices they pay have risen, drifted beyond the Fed’s inflation target and anything but. the central bank’s aggressive monetary policy. will last longer than investors had hoped.

Recession fears also echoed through severe warnings from Nike Inc (NKE.N) and cruise operator Carnival Corp (CCL.N), both of which refer to inflation-related margin pressures. read more read more

Shares of the companies fell by 12.8% and 23.3% respectively.

The Dow Jones Industrial Average (.DJI) fell 500.1 points, or 1.71%, to 28,725.51; the S&P 500 (.SPX) lost 54.85 points, or 1.51%, to 3,585.62; and the Nasdaq Composite (.IXIC) fell 161.89 points, or 1.51%, to 10,575.62.

Among the 11 top sectors of the S&P 500, real estate (.SPLRCR) was the only winner, while utilities (.SPLRCU) technical (.SPLRCT) suffered the largest percentage losses.

apple inc (AAPL.O)Microsoft Corp , Amazon.com and Nike weighed the most.

Corporate earnings reports for the quarter ending Friday’s closing bell will begin to land in a few weeks, and analyst expectations are trending downward.

Analysts are now seeing annual earnings growth of the S&P 500 totaling 4.5%, down from the 11.1% estimate at the start of the quarter.

Fund reallocations at the end of the quarter and so-called “window dressing” are likely to add to the session’s volatility.

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The number of declining issues surpassed those advancing on the NYSE by a ratio of 1.45 to 1; on Nasdaq, a 1.38-to-1 ratio favored decliners.

The S&P 500 made no new 52-week highs and 93 new lows; the Nasdaq Composite recorded 27 new highs and 380 new lows.

Volume on US stock exchanges was 12.44 billion shares, compared to the average of 11.45 billion over the past 20 trading days.

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Reporting by Stephen Culp; Additional reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru; Editing by Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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