U.S. stock market slumps Tuesday ahead Jerome Powell’s public speech

The U.S. stock market slumped Tuesday, just ahead of Federal Reserve chairman Jerome Powell’s public speech.

The S&P 500 index went down by 0.16 percent, losing 6.31 points to close at 3,957.63. The tech-leaning index Nasdaq lost 65.72 points or down 0.59 percent, concluding the trading day at 10,983.78. Meanwhile, the Dow Jones remained flat by growing 0.01 percent or 3.07 points, closing at 33,852.53.

Apple contributed to Tuesday’s slump as its shares went down by two percent due to heightened COVID-19 restrictions in Zhengzhou, which hosts the company’s largest factory. According to Bloomberg, China’s COVID-19 restrictions will cost Apple about 6 million iPhone Pro units by the end of 2022.

Another contributor to the downfall of Apple shares was billionaire Elon Musk’s public statement, revealing that the giant tech company considered omitting the availability of Musk-owned social media Twitter on the Apple App Store. Musk also complained about Apple’s ad spending on the platform.

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AMC Networks also posted a more than five percent fall on Tuesday following the resignation of CEO Christina Spade after less than three months of being in charge. The New York-based entertainment company also announced plans to cut 20 percent of its workforce.

Meanwhile, United Parcel Service (UPS) shares posted a 2.8 percent increase after the Biden administration demanded Congress pass legislation to prevent a rail strike, as UPS is its largest customer.

The three major indices also concluded Monday’s trading day lower, with S&P 500 recording more than one percent decline, its highest decline since 2008.

Analysts attributed the decline to supply chain issues related to China’s strict COVID-19 policy. The selloffs on Monday were also affected by a remark from New York Fed President John Williams, implying that the U.S. central bank would continue to hike benchmark rates.

The 10-year Treasury yield, on the other hand, posted an increase, rising from 3.701 percent to 3.755 percent.

The oil market also increased Tuesday. Brent’s crude oil rose 2.6 percent and traded for more than $86 per barrel. WTI’s crude oil rose by two percent and closed slightly under $79 per barrel after reaching its lowest trading price in 2022 on Monday.

Powell is scheduled to address the public at the Brookings Institution on Wednesday, which will be his last public speech before December’s rate-setting meeting. JPMorgan market analyst Andrew Tyler noted it was unclear whether Powell’s speech would provide new information for investors.

“While a Fed pivot is currently off the table, investors looking for a pause are unlikely to find that support from Powell this week,” Tyler said.

A week of economic data

Some important economic data are due this week. On Tuesday, National Home Price Index revealed that home prices in the U.S. had declined for the third consecutive month, falling by one percent in September from August. This decline occurred as mortgage rates went up to almost seven percent despite being at three percent just 10 months ago.

Consumer Confidence Index, another indicator of the U.S. economic strength, went down to 100.2 after posting 102.2 last October. This survey measures the attitudes and expectations of U.S. consumers toward the market situation.

According to analysts, the Fed will especially pay attention personal consumption expenditures (PCE) price index due on Thursday. The data provides insight into the change in consumer behaviors.