Rally loses steam as Fed rate hikes loom

  • US stocks fell on Monday and the Dow lost more than 340 points.
  • Major indices ended at a loss last week as investors sell risky assets and head for safe havens.
  • European natural gas skyrocketed ahead of Russia’s three-day shutdown of the Nord Stream 1 pipeline.

US stocks fell Monday, continuing the previous week’s negative performance in all three major indices as investors struggle to sustain the summer rally in the face of an aggressive Federal Reserve.

The Dow Jones Industrial Average lost more than 350 points to start the session. Last week’s decline marked the first losing week for stocks in a month.

Traders look ahead to next month’s Fed meeting, when the central bank can continue its aggressive pace of rate hikes to keep inflation in check. Fed officials last week reiterated their commitment to lower prices, raising concerns among investors that a dovish pivot is less likely than previously thought.

European markets fell on Monday as concerns about the impending closure of the Nord Stream 1 pipeline mounted.

Here’s where the US indices stood when the market opened at 9:30 a.m. Monday:

Wells Fargo warned investors should start to defend themselves as stocks begin to weather a classic bear market rally, with a top analyst suggesting that now may be the time to take positions, despite the recent surge.

AMC stock — following the recent surge that made a student huge gains — plunged more than 30% Monday amid the debut of “APE” preferred stock and talks of competitor bankruptcy.

Meanwhile, Sam Bankman-Fried’s crypto exchange FTX grew more than 1,000% last year, leaked documents show, and soared to more than $1 billion during the digital asset boom.

US oil exports to China and India have risen at a record pace as US crude moves abroad. President Biden’s release from the Strategic Petroleum Reserve has helped fill the gap of missing Russian barrels in Europe, as Russian supplies continue to reach Asian markets.

At the same time, Turkey has doubled its purchases of Russian oil this year, amid Moscow’s search for new buyers. It is one of the few countries to have increased its purchases during the war in Ukraine.

Oil prices plummeted and West Texas Intermediate fell 2.62% to $88.39 a barrel. Brent oil, the international benchmark, fell 2.63% to $94.13 a barrel.

Gold fell 0.94% to 1,746.50 an ounce. The 10-year yield rose by 0.2 basis points to 2.991%.

Bitcoin fell 1.54% to $21,192.89.

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