The mood on Wall Street is changing. Traders previously expected the Federal Reserve to cut interest rates in September, but now there’s concern that the Fed might not act quickly enough to keep the job market strong. This uncertainty has led to a stock market reset, with major indexes like the Dow, S&P 500, and Nasdaq Composite falling sharply. Some companies have reported weak earnings, and investors are worried about increased regulation of technology and disappointing AI performance. Additionally, consumer spending has slowed, and preliminary jobs data looked weak. However, the economy remains strong, with robust second-quarter growth and improving housing data. Mortgage rates have even fallen to their lowest levels since February. Despite this volatility, economists and investors will continue to navigate the changing economic landscape over the next few months.
Source: https://edition.cnn.com/2024/08/01/economy/why-dow-down-stock-market/index.html