Stocks fell on Monday as concerns about rising rates and tighter monetary policy added fuel to a rout that began in the previous session.
The Dow Jones Industrial Average fell 252 points, or about 0.7%. The S&P 500 and Nasdaq Composite fell 0.7% and 0.8%, respectively.
Wall Street suffered a sharp sell-off on Friday as brief and terse comments by Federal Reserve Chairman Jerome Powell in Jackson Hole, Wyoming, appeared to dampen hopes that the central bank would reverse its aggressive rate hike course in months following.
The Dow fell 1,008 points, or just over 3%, for its worst day since May. The S&P 500 and Nasdaq Composite fell 3.4% and 3.9%, respectively, for their worst days since June. The decline erased August’s gains for all three averages.
“On a month-to-date basis through August 25, U.S. stocks have held up better than investors might have anticipated, especially after such a strong return in July and ongoing uncertainties on multiple fronts,” said Sam Stovall, chief investment strategist at CFRA Research. “At least for the near term, pain will be the name of the game. While a test of the June 16 low may now be underway, we don’t foresee a move lower for the S&P 500.”
Meanwhile in Europe over the weekend, European Central Bank board member Isabel Schnabel warned that central banks must continue to fight inflation – even if it pushes economies into recession.
Next week brings more Fed speeches, including Vice Chairman Lael Brainard on Tuesday, ahead of the August payrolls report on Friday.
