NEW YORK, Sept 1 ― US stocks ended the month with their fourth straight daily decline yesterday, cementing the weakest August performance in seven years as worries about aggressive interest rate hikes from the Federal Reserve persist.
Selling pressure accelerated after Fed Chair Jerome Powell's hawkish remarks on Friday about keeping monetary policy tight “for some time” dashed hopes of more modest interest rate hikes, with the benchmark index down more than 5% over the past four trading sessions. Cleveland Federal Reserve Bank President Loretta Mester said yesterday the central bank will need to boost interest rates somewhat above 4 per cent by early next year and hold them there in order to bring inflation back down to the Fed's goal, and that the risks of recession over the next year or two have moved up.
Adding to investor nervousness, stocks are also heading into a historically weak period for the market in September. The jobs data from the Labour Department is due on Friday and is expected to show nonfarm payrolls rose by 300,000 last month after recording a 528,000 increase in July. Another strong report is likely to further cement expectations the Fed will continue with outsized rate hikes after three straight increases of 75 basis points.
Snap Inc rose 8.69 per cent after saying it will cut 20 per cent of staff, restructure its advertising sales unit and shut down some projects to focus on improving sales and number of Snapchat users.