Wall Street loses ground as weak stretch continues

Traders work on the floor at the New York Stock Exchange.
Investors are having a relatively quiet week as they come off the Labor Day holiday in the United States and a busy August.
(Seth Wenig / Associated Press)

Stocks fell again Wednesday, extending Wall Street‘s weak stretch this holiday-shortened week.

The Standard & Poor’s 500 dropped 0.7%. After two days of trading, the benchmark index has lost nearly half of its gains from last week. The Dow Jones industrial average fell 0.6%, and the Nasdaq composite ended 1.1% lower.

Big technology stocks were among the biggest drags on the market. Apple fell 3.6% and Nvidia dropped 3.1%.


The latest pullback in stocks came as Treasury yields climbed following data showing the U.S. services sector remains strong.

The Institute for Supply Management’s latest survey showed that the sector, which employs most Americans, grew at a faster pace than economists expected in August. The sector is among the biggest pieces of the U.S. economy and it has remained resilient throughout 2023 despite persistent inflation and rising interest rates squeezing consumers.

“That suggests there is still a tremendous amount of demand for the services sector,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management.

Van Nuys-based astrologer and witch Gogo Akopyan promises to tell you about your past, present and future. But first: coffee, stirred clockwise, with intention.

Sept. 6, 2023

Bond yields jumped following the report. The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, rose to 4.30% from about 4.25% just prior to the survey’s release.

The yield on the 2-year Treasury, which tracks expectations for the Fed, rose to 5.04% from 4.96% just prior to the survey’s results being released.

The dominant economic theme continues to be inflation and interest rates, which the Federal Reserve has boosted in an effort to bring down prices. Investors are hoping that the Fed might moderate interest rate increases going forward as inflation has been easing for months.

Wall Street expects the Fed to hold its benchmark interest rate steady at its next meeting later in September. Investors are mostly betting that the central bank will maintain that pause through the rest of the year. Economic updates last week on consumer confidence, jobs and inflation reinforced those hopes.


“It seems we’re all coalescing around a potential pause,” Hainlin said.

As many as 9,000 Americans die each year after receiving the wrong prescription drugs or doses. Pharmacies are fighting a bill to shed light on the problem.

Sept. 5, 2023

Inflation has been easing for months under the weight of the Fed’s aggressive rate hikes that started in 2022 and brought its main interest rate to the highest level since 2001. The policy raised concerns that the central bank might be too aggressive and hit the brakes on economic growth with enough force that the economy would be thrown into a recession.

A strong jobs market and consumer spending have propped up the broader economy and staved off a recession, so far. Wall Street will get several more economic updates on inflation and retail sales later in September ahead of the Fed’s next meeting.

Even so, when bond yields move rapidly higher it can force investors to reconsider whether stocks are too expensive.

“The market is just hypersensitive to these moves in rates right now,” said Ross Mayfield, investment strategy analyst at Baird.

Beyond the recent mix of economic reports, rising oil prices and a stronger dollar may also be putting traders in a selling mood.

“The dollar has really had a strong move alongside a big move higher in oil prices, both of which in a vacuum are negative for corporate profits,” Mayfield said.


All told, the S&P 500 fell 31.35 points to 4,465.48 Wednesday. The Dow dropped 198.78 points to 34,443.19, and the Nasdaq gave back 148.48 points to 13,872.47.

Several companies made big moves after reporting earnings and other updates. AeroVironment jumped 20.7% after the maker of unmanned aircrafts raised its sales forecast for the year. Roku rose 2.9% after giving investors an encouraging financial update and saying it would cut 10% of its staff.

Streaming device maker Roku said it plans to lay off 10% of its workforce, its third round of layoffs since November 2022.

Sept. 6, 2023

Markets in Europe fell and markets in Asia ended mixed.