US stocks dive as countdown to Fed statement on interest rates begins

New York, Oct 31 (SocialNews.XYZ) US stocks dived on Tuesday for straight losses on the third consecutive month, slipping again in afternoon trading on the floor after an initial recovery, as investors weighed in on the consumer confidence data that fell in tandem with the stock prices and nervous about Fed's decision Wednesday.

But still, consumer confidence in the markets beat expectations ahead of the Federal Reserve's upcoming policy decision on Wednesday, as investors feel confident that Chairman Jerome Powell will hold the rates steady after months of rate hikes to contain inflation. 

Yet fears lurk in some corners the Feds might go for a hike as inflation is rising, market reports said.

The benchmark S&P 500 continued to stick to the flat line while the Dow Jones Industrial Average declined 0.1 per cent, or less than 50 points. 

The tech-heavy Nasdaq Composite (IXIC) fell around 0.2 per cent. 

Big techies such as Apple, Google, Microsoft, Nvidia, TESLA, and others are traded on this platform and they were trading high as companies announced AI technology would open the doors to the new world as internet did, but trading slowed down on fears as most of the investments were based on debt and the concerns over the companies ability to repay, a big gamble. 

Bonds rallied after the US Treasury cut its estimate of how much the government would need to borrow in the fourth quarter, easing some pressure on stocks. The 10-year Treasury yield (TNX) slid about 1 basis point to trade around 4.86 per cent, market reports said. 

The 45-day deadline on continued expenditure of government expires on November 17.

Fed policymakers have indicated their decision on any future rate hike hinged on the recent surge in Treasury yields which could be a major decision maker. 

Any increase in yields on bonds usually tighten the markets.

Investors are highly focused on whether the central bank will hold interest rates steady, as most analysts expect, or hike at their meeting starting on Tuesday.

"Consumers also expressed concerns about the political situation and higher interest rates. Worries around war/conflicts (Israel-Hamas and Russia-Ukraine) also rose amid the recent turmoil in the Middle East. The decline in consumer confidence was evident across householders aged 35 and up, and not limited to any one income group," Dana Peterson, chief economist at The Conference Board said.

Source: IANS