On the 25th (local time), New York stocks opened lower as concerns grew that the Federal Reserve may not be aggressive in cutting interest rates due to stronger-than-expected economic data.
As of 9:49 a.m., at the New York Stock Exchange, the Dow Jones Industrial Average fell 151.04 points, or 0.33%, from the previous session to 45,970.24. The Standard & Poor's (S&P) 500 index fell 45.40 points, or 0.68%, to 6,592.57 from the prior close, and the Nasdaq composite dropped 209.62 points, or 0.93%, to 22,288.23.
Expectations for rate cuts eased as second-quarter gross domestic product (GDP) and weekly initial unemployment insurance data released before the opening came in better than expected. The final reading of U.S. second-quarter GDP growth surged 3.8% at an annualized pace from the previous quarter. It rebounded sharply from the previous quarter's -0.5% and was 0.5 percentage point (P) higher than both the market forecast and the advance estimate of 3.3% growth.
For the week ended 20th, initial claims for unemployment insurance, seasonally adjusted, totaled 218,000, down 14,000 from the prior week and below the market forecast of 235,000.
Market participants are also watching personal consumption expenditures (PCE) to be released on the 26th. Sam Stovall, chief investment strategist at CFRA, said, "Because the unemployment data came in less bad than expected, we have to see whether the Fed will not cut rates in October and December, or whether it needs to wait until December."
By sector, all groups are falling across the board except consumer staples. Oracle shares fell more than 4%. Rothschild & Co Redburn issued a sell rating on Oracle, warning that the market is overestimating Oracle's cloud contract revenue, which weighed on the stock.
Used-car retail giant CarMax fell more than 20% after quarterly results missed expectations.
Canada-based mining company Lithium Americas rose 15% on the day, extending the more than 95% surge the previous day on news that the Donald Trump administration is seeking an equity acquisition.
European stocks were lower. The Euro Stoxx 50 index was down 0.51% from the previous session. Germany's DAX fell 0.81%, while France's CAC 40 and Britain's FTSE 100 slipped 0.51% and 0.22%, respectively.
International oil prices were also weaker. At the same time, West Texas Intermediate (WTI) for November delivery, the nearest-month contract, was down 1.18% from the previous session at $64.22 a barrel.