Yahoo Finance Stock market news live updates: Stocks extend losses after three-week selloff
U.S. stocks sank lower in a choppy post-Labor Day session Tuesday as traders remained on edge ahead of the Federal Reserve's next policy move later this month.
The benchmark S&P 500 fell 0.4%, while the Dow Jones Industrial Average declined by 0.5%, or about 170 points. The tech-heavy Nasdaq Composite led the declines, tumbling 0.7%. The moves come after three straight weeks of losses for the major averages.
Losses across equities resumed following the release of fresh data that showed U.S. services activity gained momentum in August, a sign to investors that Fed officials may proceed with a heftier rate increase of 75 basis points September 21.
The Institute for Supply Management reported its non-manufacturing PMI rose to a reading of 56.9 last month from 56.7 in July, the second straight monthly increase ofter a three-month decline.
Immediately following the results, the CME FedWatch Tool reflected a new high in probability — a 74% chance — that the Federal Reserve will raise interest rates by another 0.75%.
Treasury yields nudged higher as investors await the central bank's next move. The benchmark 10-year note climbed to 3.338%, while the 2-year Treasury note rose to yield 3.499%, its highest level since 2007.
In commodity markets, oil prices edged lower after a temporary rally on the heels of the first supply cut by OPEC+ in more than a year as the group works to manage global crude markets. West Texas Intermediate crude oil fell to $86.77 per barrel while Brent futures ticked down to $92.65 per barrel.
And on the cryptocurrency front, Bitcoin (BTC-USD) again slipped below the $20,000 level.
Shares of Bed Bath & Beyond (BBBY) plunged 18.4% on Tuesday. Last week, the home-goods retailer announced in a strategic update that it would lay off staff and shutter approximately 150 stores as part of a turnaround effort for its struggling business.
Reports surfaced this weekend that the company’s chief financial officer Gustavo Arnal died by suicide Friday afternoon after falling from a skyscraper in New York's Tribeca area known as the "Jenga" tower. Prior to his death, Arnal was named in a $1.2 billion shareholder lawsuit alleging involvement in a “pump and dump” scheme.
"The company is in the early stages of evaluating the complaint but based on current knowledge the company believes the claims are without merit," a spokesperson for Bed Bath & Beyond told Yahoo Finance.
Digital World Acquisition (DWAC) shares nosedived more than 11% after the special purpose acquisition company that was set to merge with former President Donald Trump’s social media platform failed to garner enough shareholder support to extend the deadline to complete the deal.
The moves come after the Labor Department released its latest monthly jobs report for August on Friday. The U.S. economy added 315,000 jobs last as the unemployment rate rose to 3.7%, according to government data.
“The modest slowdown in employment growth in August may be welcome by the Fed, but it won't prevent further sizable rate hikes in the months ahead,” Nancy Vanden Houten and Kathy Bostjancic of Oxford Economics said in a note Friday. “Fed Chair Powell made clear last week that the FOMC plans to push rates well into restrictive territory to bring down inflation and prevent an unmooring of inflation expectations.”
Bank of America strategists led by Michael Hartnett warned on Friday of a “fast inflation shock” and “slow recession shock,” with investors anticipating continued monetary tightening by the Federal Reserve.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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