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The Dow Jones Industrial Average plunged again on Tuesday after investors weighed the timing of the next interest rate hike and energy stocks and oil prices fell on global supply concerns.
The U.S. Federal Reserve will meet next week to discuss monetary policy and decide whether it will hike rates for the first time since December 2015.
With the Fed in focus, Money Morning Capital Wave Strategist Shah Gilani has correctly predicted that volatility is roaring back in September. Check out what he has to say, right here.
Let's look at the final numbers on Tuesday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,067.16; -257.91; -1.41%
S&P 500: 2,127.02; -32.02; -1.48%
Nasdaq: 5,155.25; -56.63; -1.09%
Here's a look at today's most important market events and stocks, plus a preview of Wednesday's economic calendar.
DJIA Today: Fleeting Rate Hike Hopes Batter Financial Stocks, Oil Prices Crater
The Dow Jones fell more than 250 points on Tuesday, while all 10 primary S&P 500 sectors were in the red. The sell-off was fueled by a sharp downturn in financial stocks as the odds of a rate hike fell again. According to CME FedWatch, the odds of a September rate hike now sit at just 15%. That hammered shares of banking stocks. Shares of Goldman Sachs Group Inc. (NYSE: GS) fell more than 2.3%, while shares of Morgan Stanley (NYSE: MS) dropped more than 2.5%.
Investors are still speculating on the timing of the next interest rate hike after Federal Reserve Governor Lael Brainard said Monday that the central bank should keep monetary policy loose despite improving signs in the U.S. economy. Here's when we expect the next rate hike.
Oil prices were plunging this afternoon after a troubling report from the International Energy Agency (IEA). The global energy watchdog projected a sharp decline in international demand in the year ahead. The IEA says it anticipates oversupply in the market the first six months of 2017. That cuts into previous forecasts and expectations that anticipated greater balance in the markets toward the end of this year.
The WTI crude oil price today fell more than 3%.
Meanwhile, the Brent crude oil price fell 2.6%.
The silver lining is that today's report could place greater pressure on OPEC and Russia to cooperate on supporting oil prices when the global oil cartel meets this month to discuss its production targets.
But the big news today was the health of Democratic presidential candidate Hillary Clinton. On Monday, the political and financial media were asking, "Will Hillary Clinton drop out of the presidential race?" Clinton was recently diagnosed with pneumonia and appeared to collapse during a 9/11 memorial ceremony in New York City over the weekend. According to reports, Democrats are nervous about Clinton's health, prompting speculation about the future of her candidacy. Here's the latest on Clinton's health scare and what to expect during the 2016 election.
Top Stock Market News Today, Sept. 13, 2016
- Shares of Alibaba Group Holding Ltd. (NYSE: BABA) were sliding after hedge fund manager Jim Chanos reiterated his short position against the Chinese e-commerce giant. Chanos again raised concerns about the company's business model and questioned the firm's cash flows. Alibaba's Vice Chairman Joseph Tsai said that he would invite Chanos to China to learn more about the company and reminded short-sellers that the stock has jumped by more than 50% over the last year.
- Another day, another big downgrade. Shares of Netflix Inc. (Nasdaq: NFLX) dropped more than 3.3% after the stock received a downgrade from Macquarie and a price target of $85. The downgrade of NFLX stock came on concerns about rising content costs and increased competition in the digital streaming space.
- Shares of Apple Inc. (Nasdaq: AAPL) pushed up 2.4% on news that pre-orders for its new iPhone 7 are booming. Earlier today, T-Mobile US Inc. (Nasdaq: TMUS) CEO John Legere said that pre-orders for the new device have gotten off to a "very strong start." Rival Sprint Corp. (NYSE: S) also announced that it has experienced strong demand for the iPhone 7 and iPhone 7 Plus.
- Shares of Wells Fargo & Co. (NYSE: WFC) fell nearly 4% after the company announced plans to eliminate product sales goals at the end of 2016. The decision comes weeks after the company settled with the CFPB after employees opened millions of fake accounts without the permission of their customers. The firm agreed to a $185 million settlement and fired more than 5,000 employees. This afternoon, Treasury Secretary Jack Lew said in an interview at the annual Delivering Alpha conference that this was an important moment and that Americans and Congress should embrace the regulatory agency that discovered this scheme.
Wednesday's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- Import and Export Prices at 8:30 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.