Skip to Content
Midday Market Update

U.S. Shares Down on Rate Confusion

Mentioned: ,

U.S. Market 
U.S. shares retreated on concerns the Fed could increase interest rates in September following Friday's comments from the head of the central bank.

Investors continued to digest comments last Friday by U.S. Federal Reserve chairwoman Janet Yellen, who said that the case for a U.S. interest-rate hike "has strengthened in recent months," because of "the continued solid performance of the labor market and our outlook for economic activity and inflation."

The comments sparked expectations of a possible hike in September. However, previous similar comments have not led to any action by the central bank.

U.S. consumer confidence edged up to 101.1 in August from a reading of 96.7 in July, The Conference Board said. Economists were expecting the index to come in at 97.0. “Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers' assessment of both current business and labor market conditions was considerably more favorable than last month. Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months.”

Stocks on the Move
Shares of  Apple (AAPL) are falling after the EU antitrust regulator said the company’s tax arrangement with Ireland allowed it to pay substantially less tax than other businesses over many years.  Abercrombie & Fitch (ANF) shares tumbled after the retailer posted a decline in quarterly sales.

Foreign Markets
After an upbeat opening, European shares were trading steadily higher, rebounding from yesterday's losses. Exporters rose as the euro fell against the dollar.

Stocks were broadly higher in Asia on Tuesday, catching an updraft from U.S. stocks yesterday and commodities price rebounds.

Marco Caprotti does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.