XLU - Stocks Tumble VIX Spikes As Fear Over High Interest Rates Intensifies: What's Driving Markets Tuesday? | Benzinga
Stocks are deep in the red during midday trading on Tuesday, with September proving to be a negative month for Wall Street, as has traditionally been the case.
All major indices, as well as every individual sector within the S&P 500 index, experienced declines throughout the day. The CBOE Volatility Index (VIX), also known as the “fear index”, rocketed 9% hitting its highest level since Aug. 18.
Investors fear that the Fed’s commitment to maintaining high-interest rates for an extended period to combat inflation could slow down the economy and reduce corporate profit margins.
Adding to the unease is the looming specter of a government shutdown, with the Oct. 1 deadline fast approaching. Treasury yields, across various maturities, remain perched at levels unseen for over a decade.
Minneapolis Fed President Neel Kashkari took on a hawkish tone on Tuesday, suggesting a 40% likelihood of a scenario in which the Fed would need to implement significant rate hikes to counteract inflationary pressures.
Cues From Tuesday’s Trading:
The S&P 500 fell 1%, hitting its lowest level since June 8. The Dow dipped 0.9%, falling to the lows of July 10.
The tech-heavy Nasdaq 100 tumbled 1.1%, while the Russell 2000 fell 0.6%.
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