US stocks fall after weak consumer data, muted Fed

VIDEO: REUTERS
Powell speaking at the Council on Foreign Relations in New York, on June 25, 2019.
Powell speaking at the Council on Foreign Relations in New York, on June 25, 2019.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks fell on Tuesday (June 25) following disappointing US consumer data and measured comments from the Federal Reserve chief on the likelihood of an interest rate cut.

Large technology companies including Amazon, Google parent Alphabet and Facebook were especially weak as US stocks fell further into the red as the session progressed.

Briefing.com said investors took profits after remarks from Fed chairman Jerome Powell, who disappointed the market because he "didn't strike the overly dovish stance it wanted."

The tech-rich Nasdaq Composite Index led the market lower, shedding 1.5 per cent to settle at 7,884.72.

The Dow Jones Industrial Average dropped 0.7 percent to 26,548.22, while the broad-based S&P 500 tumbled 1.0 percent to 2,917.38.

Powell's speech in New York amplified the central bank's recent message that policymakers are ready to step in to protect the world's largest economy amid heightened worries that US trade conflicts are crimping growth.

But Powell warned that the central bank would not "overreact" to individual data points and short-term swings in sentiment that could quickly evaporate.

 

The remarks come as futures markets have bet decisively that the Fed will cut interest rates next month. Powell described the US central bank as "grappling" with the question.

Ongoing US trade conflicts also weighed on the Conference Board's estimate of consumer confidence, which sank to a 21-month low.

"The escalation in trade and tariff tensions earlier this month appears to have shaken consumers' confidence," Lynn Franco, the board's senior director for indicators, said in a statement.

Investors are looking ahead to a meeting at the G20 later this week between US President Donald Trump and Chinese leader Xi Jinping with hopes of progress on the trade front.

Among individual companies, Botox-maker Allergan surged 25.4 per cent after agreeing to be acquired by US biopharma company AbbVie. AbbVie dropped 16.4 per cent.