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S&P 500 Closes Down, but Above Lows Despite Fresh Worries of Fed Tightening By


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By Yasin Ebrahim – The S&P 500 trimmed some losses Thursday, even as an unexpected rise in monthly retail sales renewed expectations for the Federal Reserve to tighten monetary policy with just days to go until the U.S. central bank’s meeting next week.    

The fell 0.16%, the slipped 0.18%, or 63 points, the Nasdaq gained 0.13%.

“[T]he Treasury curve bear steepened and the S&P500 fell presumably on the good news is bad for Fed expectations logic,” Scotiabank said in a note.

Commerce Department Thursday said that retail sales rose. That confounded economists’ forecast for a 0.8% decline. The retail sales control group – which has a larger impact on U.S. GDP –   topping expectations for a 0.1% decrease. 

It is clear that retail sales have shown an upside, which suggests the economic impact of the current pandemic wave has not been significant.  Desjardins wrote in a memo. “This could further reassure Federal Reserve officials,” it added. 

Wall Street expects the Fed to continue its path towards tightening monetary policy at its next two-day meeting.  

“Retail sales rebounded in August, despite sizable drag from auto sales. Outside of autos, sales posted broad-based increases, with particular strength in online sales, general merchandise and furniture sales,” Jefferies (NYSE:) said in a note.

The U.S. Department of Labor reported increased by 20,000 to 332,000 in the week ended Sept. 11, missing forecasts for a 18,000 decline.

On the manufacturing front, The Philadelphia Fed reported that its rose to a reading of 30.7 from 19.4 in August.

As the most underperforming sectors, energy and material were not helped by the positive economic data.

Newmont Goldcorp Corp (NYSE:), Martin Marietta Materials (NYSE:), and Freeport-McMoran Copper & Gold (NYSE:), were the worst performers in materials, with the latter down 6%.

Freeport-McMoran Copper & Gold Inc (NYSE:) deepens its losses amid an ongoing decline in prices as tailwinds including stimulus and inflation concerns are expected to fade.

Even though oil prices reduced its losses, energy regained some of its gains.

The session ended on a high note with tech stocks bouncing back from session lows. This was despite a rising Treasury yield, which can hurt growth stocks. 

Google-parent Alphabet (NASDAQ:), Apple (NASDAQ:), and Facebook (NASDAQ:), were in the red, while Microsoft (NASDAQ:) cut losses to end the day above the flatline.

Beyond Meat, (NASDAQ:), fell 2.2% in other news after Piper Sandler reduced the stock’s weight to neutral from underweight, and dropped its target price to $95, from $120. The reason for this was that it expects slower sales.