US stocks trade mixed after string of losses as investors assess new Fed comments and ADP report

  • US stocks rose Wednesday after losing ground in the previous three sessions. 
  • Investors on the last day of August trading assessed ADP private payroll figures. 
  • Cleveland Fed President Loretta Mester said she sees the Fed raising rates beyond 4%. 

US stocks were mixed Wednesday, struggling to break a run of losses since the Federal Reserve Chairman Jerome Powell signaled a higher-for-longer environment for interest rates, with investors assessing fresh rates commentary from another key Fed official and a report on monthly private payrolls. 

Wall Street’s major indexes were aiming first win in three sessions, which would close out trading for the month of August. The indexes were on track to lose ground in August, paced by a nearly 4% decline for the Nasdaq Composite after strong gains in July.

Cleveland Federal Reserve President Loretta Mester in prepared remarks for a Wednesday speech in Dayton said she sees its “necessary” for the Fed to raise interest rates above 4% by early 2023 and to hold it there as policy makers battle to tamp down inflation. She sits on the Fed’s rate-setting committee. 

Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday: 

“While it is clear that the fed funds rate needs to move up from its current level, the size of rate increases at any particular FOMC meeting, and the peak fed funds rate will depend on the inflation outlook, which depends on the assessment of how rapidly aggregate demand and supply are coming back into better balance and price pressures are being reduced,” Mester said. 

Investors also assessed ADP’s private payrolls report showing the US private sector added 132,000 new jobs in August. Economists surveyed by Bloomberg expected the creation of 200,000 payrolls.

“With the non-farm payrolls to come at the end of the week, any further strength would underline the Fed’s resolve to plough on with aggressive tightening against a backdrop of an economy which seems for the moment relatively unaffected by the hikes so far,” said Richard Hunter, head of markets at Interactive Investor, in a note. 

Friday’s jobs report may show the addition of 293,000 jobs in August following the unexpectedly strong gain of 528,000 in July. 

Around the markets, meme-trader favorite and struggling retailer Bed Bath & Beyond dropped following its plans to offer stock, cut staff and close stores

Oil prices fell. West Texas Intermediate crude lost 2.3% to $89.53 per barrel. Brent crude, the international benchmark, lost 2.4% to $95.51. 

The 10-year Treasury yield rose 3 basis points to 3.13%.

Gold rose 0.7% to $1,773.50 per ounce. Bitcoin was 0.1% higher at $21,712.04. 

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