US Market falls on policy tightening woes

The US stock market finished session lower on Tuesday, 31 May 2022, losing steam after last week's rally, as weaker than expected Conference Board's consumer confidence data and hawkish comments from Federal Reserve Governor Christopher Waller dampened sentiments.

At the close of trade, the Dow Jones Industrial Average index decreased by 222.84 points, or 0.67%, to 32,990.12. The S&P500 index dropped 26.09 points, or 0.63%, to 4,132.15. The tech-heavy Nasdaq Composite Index fell 49.74 points, or 0.41%, to 12,081.39. For the month, the S&P and the Dow closed fractionally higher while the Nasdaq was 2.1% lower.

Total nine of 11 major S&P sectors ended the session red, with energy (down 1.65%), materials (down 1.6%), utilities (down 1.38%), healthcare (down 1.37%), and real estate (down 1.34%) issues suffered the largest%age losses.

Equities began the day lower on worries inflation was proving more persistent, intensifying the debate over how quickly central banks will raise interest rates. Fears central-bank rate hikes may tip the economy into a recession are keeping investors watchful as rising food and energy costs squeeze consumers.

Federal Reserve governor Christopher Waller said in a speech at the Institute for Monetary and Financial Stability in Frankfurt, Germany, that he favored 50 basis point hikes at every meeting until there is a substantial reduction in inflation.

Federal Reserve Chair Jerome Powell is meeting President Joe Biden in a rare Oval office meeting on Tuesday to discuss inflation ahead of US payroll numbers later this week.

Among blue chips, Johnson & Johnson, Honeywell International, Boeing and 3M shed about 2 to 2.8% in the session. Merck, Coca-Cola, Cisco Systems, American Express, JP Morgan Chase, Visa, Caterpillar and McDonalds also ended notably lower. Alphabet gained more than 1.5%, while Facebook, Microsoft and Apple ended with modest losses.

ECONOMIC NEWS: The Conference Board said its consumer confidence index dipped to 106.4 in May from an upwardly revised 108.6 in April.

Among Indian ADR, Wipro fell 2% to $5.98, WNS Holdings sank 1.4% to $72.77, ICICI Bank fell 0.57% to $19.25, Azure Power Global fell 4.8% to $14.86, and HDFC Bank fell 2.3% to $57.57. Dr Reddy's Labs sank 1.7% to $55.35. Tata Motors added 1.1% to $28.50 and INFOSYS added 0.37% to $18.86.

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