November 29, 2022

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The S&P 500 closed lower on Wednesday after two days of solid gains

The S&P 500 closed lower on Wednesday after two days of solid gains

US stocks fell on Wednesday as Wall Street failed to sustain sharp gains from the past two sessions.

The Dow Jones Industrial Average fell 71 points, or 0.2%, to 30,246.09. Earlier today, it fell as much as 429.88 points. The S&P 500 fell 0.3% to close at 3,778.55, and the Nasdaq Composite fell 0.2% to 11148.64.

“It’s a moment to pause for the market to consider how long the rally has continued over the past couple of days,” said Young Yu Ma, chief investment analyst at BMO Wealth Management. “The market is evaluating that it will take a lot for the Fed to make a complacency. Yes, number of tremors It was very welcome, no doubt about that. But this is actually the tip of the iceberg in terms of what the Fed needs to take a softer stance.”

“There is some truth creeping into the market and that enthusiasm for quite a few has started to fade,” he added.

Shares saw a big rally earlier in the week, with the S&P 500 posting its biggest two-day gain since 2020, as prices fell from multi-year highs. On Wednesday, though, Rates rose sharply, with the 10-year Treasury yield rising 12 basis points to 3.745% after briefly dropping below 3.6% in the previous session. This put pressure on the stocks for most of the day.

In its latest report, the ADP said private payrolls increased by 208,000, topping Dow Jones estimates. Traders are looking forward to Friday’s non-farm payrolls report. On Wednesday, the ISM services index for September was also released Shows strong growth for the month of September.

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Some market participants questioned whether these signs might mean that markets have finally settled on the bottom after sharp declines in the previous quarter.

“The third-quarter earnings report isn’t too far off and it’s certainly in the market psychology that the second-quarter earnings season helped stabilize the markets,” Ma said. “There was a lot of pessimism in the market that was able to recover quite strongly a couple of months ago. There is now also hope that earnings season can stabilize the market and maybe come to the rescue again, the way it did last quarter.”