Wall Street falls for the second day in a row

(Patria) - Wall Street stock prices fell for the second day in a row, as data on strong growth in the US service sector sparked fears that the Fed will keep interest rates elevated for longer than investors had hoped.

The Dow Jones weakened by 0.57 percent, to 34,443 points, while the S&P 500 slipped 0.70 percent, to 4,465 points, and the Nasdaq index 1.06 percent, to 13,872 points.

The fall in the index for the second day in a row is a consequence of a report on stronger-than-expected growth in the US service sector.

The ISM index of activity in this sector rose to 54.5 points in August, while analysts expected 52.5 points, and purchasing prices in this sector also increased.

This, however, did not change analysts' estimates regarding interest rate hikes. The vast majority of them expect the US central bank to leave interest rates unchanged at its September meeting, and most of them also believe that the Fed will not raise interest rates further in November.

However, due to the resilience of the economy, as well as elevated inflation, it is increasingly likely that the Fed will not start lowering interest rates as quickly as investors had hoped, Hina reports.

- Stronger than expected, data from the service sector shows that investors are still misreading the bottom of the post-pandemic coffee cup.

Investors hope that the Fed will start lowering interest rates soon, but the economy is not slowing down, and inflation is not falling fast enough for the Fed to start lowering interest rates in the foreseeable future - says BMO director Carol Schleif.

Therefore, questions remain open as to whether the Fed will raise interest rates again and how long it will keep them at an elevated level. Thus, in the coming period, the direction of the market will largely depend on speculation regarding these issues.

Stock prices also fell on European stock exchanges yesterday. The London FTSE index weakened by 0.16 percent, to 7,426 points, while the Frankfurt DAX slipped 0.19 percent, to 15,741 points, and the Paris CAC 0.84 percent, to 7,194 points.