US stocks slip as investors await Fed chief’s speech

NEW YORK: Wall Street equities closed mostly lower on Tuesday (Aug 23) as investors waited with bated breath for Federal Reserve (Fed) chair Jerome Powell’s end-of-week speech and any revelations on his interest rate plans.

Powell is due to appear at the annual gathering of central bankers in Jackson Hole, Wyoming on Friday, and expected to reiterate the message that the Fed is not yet ready to end the steep rate hikes needed to quell the surge in inflation, despite some signs of progress.

“I think that investors are bracing for some hawkish commentary from Fed chair Powell this coming week,” said Jack Ablin of Cresset Capital.

Meanwhile, the latest data on new home sales, showed a sharp decline in July to their lowest rate since early 2016, as the real estate market continues to feel the impact of higher borrowing costs.

The week also will feature a key report on the Fed’s favoured inflation index, as well as consumer confidence, sales of big-ticket goods and an updated read on second quarter GDP, which fell 0.9 percent.

The Dow Jones Industrial Average lost 0.5% to finish the day at 32,909.59.

The broad-based S&P 500 slipped 0.2% to 4,128.73, while the tech-rich Nasdaq Composite Index was flat, closing at 12,381.30.

The S&P 500 dipped after data showed private-sector business activity in the US contracted for a second straight month in August, with particular softness in the services sector as demand weakened in the face of inflation and tighter financial conditions.

Among individual stocks, Twitter dropped 7.3% after the social media platform's former security chief claimed in whistleblower testimony that it misled users and US regulators about gaps in its online protections.

And pandemic darling Zoom Video fell 16.5% after second-quarter results revealed a slowdown in revenue growth. – AFP, Reuters

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