Wall Street down on renewed rate concerns
Wall Street's three major averages closed lower on Wednesday with the Nasdaq's 1 percent loss leading declines after stronger-than-expected services sector data fueled concerns that still sticky inflation would mean that interest rates stay higher for longer. The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing Purchasing Managers' Index rose to 54.5 last month against expectations of 52.5, while a gauge of prices paid by service-sector businesses for inputs increased. Traders were betting on a 93 percent chance that the Federal Reserve would leave interest rates unchanged after its meeting on September 20, while bets on another pause in November were around 57 percent, CME Group's FedWatch Tool showed. "The stronger-than-expected ISM services data shows that investors are still not very skilled at reading the post-pandemic tea leaves," said Carol Schleif, chief investment officer at BMO's family office in Minneapolis. While market participants have been hoping for interest rate cuts soon, Schleif said the data shows a strong economy and inflation that is not coming down "as fast as the Fed would need to start cutting rates any time in the foreseeable future." Earlier in the day Boston Fed President Susan Collins stressed the need for the central bank to "proceed carefully" with its next monetary policy steps. On top of rate concerns, Apple, which finished down 3.6 percent, was pressured by a report that China had banned officials at central government agencies from using iPhones and other foreign-branded devices for work. The Dow Jones Industrial Average fell 0.57 percent, to 34,443, the S&P 500 lost 0.70 percent, at 4,465 and the Nasdaq Composite dropped 1.06 percent, to 13,872.47. Lockheed Martin shares sank 4.8 percent after the US weapons maker trimmed the delivery outlook for its F-35 jets. Roku shares rose 2.9 percent after the company said it would reduce its workforce by about 10 percent and limit new hiring. (Reuters)