On Monday Wall Street opened lower as oil prices fell the most in a month and investors weighed the chances of an interest rate hike in the months to come. Oil prices dropped close to 3% as China boosted exports of refined products, U.S. producers added rigs for an eighth straight week, and prospects surfaced for increased exports from Iraq and Nigeria. With the earnings season coming to an end, investor will direct their attention to Federal Reserve Chair Janet Yellen’s speech on Friday at the annual central bankers’ meeting in Jackson Hole, Wyoming.
“The markets will start to get a little bit nervous about what’s going to be said, what kind of indications will be given about a September hike,” stated Robert Pavlik, chief market strategist at Boston Private Wealth.
The case for a looming rate hike was strengthened by Fed Vice Chairman Stanley Fischer’s remarks that the U.S. economy was near to reaching job and inflation targets. New York Fed president and permanent voting member William Dudley commented last week that a hike as soon as next month was probable.
The dollar index .DXY gained for the second day, following five consecutive sessions of losses. Traders have waged in an 18% chance of a rate hike for September and a 40.6% probability for December, according to the CME Group’s FedWatch tool.
Eight of the 10 major S&P 500 indexes declined, with the energy sector falling the most by 1.19 percent, followed by a 0.67 percent decline in materials. On Monday morning, the Dow Jones industrial average fell 84.71 points, 0.46%, at 18,467.86. The S&P 500 dropped 7.87 points, or 0.36%, at 2,176. Also, the Nasdaq Composite fell 13.34 points, or 0.25%, at 5,225.03. Declining issues outstripped advancing ones on the NYSE by 1,836 to 800. On the Nasdaq, 1,456 issues dropped and 785 gained. The S&P 500 index displayed five new 52-week highs and no new lows, while the Nasdaq recorded 24 new highs and six new lows.