Wall Street closes lower on renewed recession concerns

Tuesday saw a lower closing price on Wall Street as signs of a slowing economy increased worries that the Fed’s efforts to contain decades-high inflation may trigger a severe recession.

All three major indices declined after statistics revealed that industrial orders dropped for a second consecutive month and that job vacancies in the United States plummeted to their lowest level in nearly two years in February, suggesting that the labour market was cooling.

Figures from Monday had also suggested that American manufacturing activity was declining. Many are concerned that hiring is moving too slowly and may harm the economy because there are fewer job openings. That backdrop, particularly, fuels worries of a looming recession.

After JPMorgan CEO Jaime Dimon cautioned in a letter to shareholders that the US banking crisis is still ongoing and that its effects will last for years, bank stocks suffered. The S&P 500 banking index lost 1.9%, while Bank of America and Wells Fargo both saw declines of more than 2%.

The S&P 500’s 11 sector indices all experienced declines, with the industrials index losing 2.25% and the energy index dropping 1.72%. The S&P 500 finished the session down 0.58% at 4,100.68 points, marking the first time in a week that it has closed lower.

The Dow Jones Industrial Average down 0.59% to 33,403.04 points, while the Nasdaq fell 0.52% to 12,126.33 points. The industrial sector bellwether Caterpillar dropped 5.4%. Nvidia, a hefty chipmaker, dropped 1.8%, contributing more than any other stock to the loss in the S&P 500.

The S&P 500 sector indexes for healthcare and utilities, which many investors believe will do better during a recession, were among the few to increase on Tuesday.