Wall St posts third straight quarterly loss as inflation weighs, recession looms By Reuters

By Stephen Culp

NEW YORK (Reuters) – The closed the books on its steepest September decline in over a decade on Friday, skidding throughout the end line of a tumultuous quarter fraught with traditionally scorching inflation, rising rates of interest and recession fears.

All three main indexes ended sharply decrease, having quashed a short rally early within the session.

The S&P and the Dow notched their third consecutive weekly declines, and all three indexes posted their second straight month-to-month losses.

Within the first 9 months of 2022, Wall Road suffered three quarterly declines in a row, the longest dropping streak for the S&P and the Nasdaq since 2008 and the Dow’s longest quarterly hunch in seven years.

“It is one other ugly day to finish an unsightly quarter in what’s wanting like a really ugly 12 months,” mentioned Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. “Traders will look again and understand this was the 12 months the Fed pulled a complete 180 on their views on inflation and rapidly turned extremely hawkish.”

The Federal Reserve has rattled markets by partaking in its most relentless collection of rate of interest hikes in a long time with the intention to rein in stubbornly excessive inflation, which has many market individuals eyeing key financial knowledge for indicators of a looming recession.

“The belief that the Fed is doing something they’ll to fight 40-year-high inflation has traders nervous they’ll push the financial system over the sting and into recession,” Detrick added.

The Commerce Division’s private consumption expenditures (PCE) report did little to assuage these fears, exhibiting that whereas shoppers proceed to spend, the costs they’re paying have accelerated, drifting additional past the Fed’s inflation goal and all however making certain the central financial institution’s hawkish financial coverage will proceed longer than traders had hoped.

Recession fears additionally echoed by way of dire warnings from Nike Inc (NYSE:) and cruise operator Carnival (NYSE:) Corp, each citing inflation-related margin pressures.

In line with preliminary knowledge, the S&P 500 misplaced 51.74 factors, or 1.42%, to finish at 3,588.73 factors, whereas the Nasdaq Composite misplaced 153.77 factors, or 1.43%, to 10,583.73. The Dow Jones Industrial Common fell 467.12 factors, or 1.60%, to twenty-eight,758.49.

Company earnings experiences for the quarter that ends with Friday’s closing bell will start touchdown in a number of weeks, and analyst expectations are trending downward.

Analysts now see annual S&P 500 earnings development of 4.5%, on combination, down from the 11.1% estimate when the quarter started.

Quarter-end fund reallocations and so-called “window dressing” is probably going contributing to the session’s volatility.