U.S. stocks fell in volatile trade on Wednesday after strong factory activity and job openings data stoked concerns that the Federal Reserve would keep raising interest rates sharply this year.
Ten of the 11 major S&P sectors declined, with financial and healthcare stocks down 2.1% and 2% respectively. Energy stocks gained 1% as Brent Crude rose to $117 a barrel.
U.S. manufacturing activity unexpectedly picked up pace in May as demand for goods remains strong, easing concerns about an imminent recession.
A separate report showed U.S. job openings fell to 11.4 million in April, but still remained at considerably high levels, suggesting that wages would continue to rise as companies try to attract workers, and contribute to inflation staying uncomfortably high for a while.
“Inflation is still front and center for the markets. All of the economic data that you’re going to be looking at over the next couple of months is going to be looked through an inflation viewpoint,” said Paul Nolte, portfolio manager at Kingsview Investment Management.
So when nonfarm payrolls data is released on Friday, markets will focus on wage growth, Nolte added.
Echoing comments from Fed Governor Christopher Waller, San Francisco Fed President Mary Daly said on Wednesday she sees half-point interest rate hikes in the next couple of meetings as the central bank battles high inflation, lifting rates to 2.5% as quickly as possible.
“Anytime there’s a Fed speaker, investors are looking for little clues as to what’s going to happen post September,” said Paul Kim, chief executive officer, Simplify…
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