The main market indices on Wall Street saw their biggest decline since June on Monday, but nothing changed in early trade on Tuesday.
At the opening bell, the Dow Jones Industrial Average decreased by 30.09 points, or 0.09 percent, before vacillating between positive and negative territory in the lukewarm early trade.
As markets looked to take a break as investors awaited fresh manufacturing and services data, the S&P 500 and Nasdaq composite both began somewhat down before briefly rising.
It comes after a significant selloff on Monday, when the Dow dropped 643 points due to worries over the US Federal Reserve’s strong hints about future rate rises.
As market attention shifted to a Fed meeting later this week in Jackson Hole, where central bank Chair Jerome Powell is anticipated to reiterate a firm resolve to wipe out inflation that is running at a four-decade high, Wall Street had finished substantially down in the previous two sessions.
The notion that the Fed is about to pivot has been misunderstood by the market, according to Chris Grisanti, chief equities strategist at MAI Capital Management.
I believe Powell will be more hawkish than the general consensus currently holds. He will state once again that their main objective is to stop inflation and that he is not there to promote the bond or equities markets. That anxieties were reflected in the market yesterday.
Markets have risen since mid-June after a rocky start to the year on expectations that inflation has peaked.
However, the summer surge was cut short last week due to fresh concerns about the Fed’s aggressive path toward tightening monetary policy.
At the central bank’s meeting next month, traders are still divided between a 50-basis point and a 75-basis point increase, although analysts surveyed by Reuters predict a 50-basis point increase.
On Tuesday, Zoom Video fell after lowering its full-year projection while Macy’s and J.M. Smucker both increased after posting better-than-expected quarterly earnings.
After the closing bell, earnings announcements from Advance Auto Parts, Intuit, and Nordstrom are anticipated.