US stocks traded moderately lower late morning trading, feeling the pressure of a selloff in European markets as G7 leaders pushed for a resolution on the Greece crisis and investors in the US weighed the possibility of a September rate hike after Friday’s solid jobs report.
The Dow Jones Industrial Average dropped 31 points or 0.2% at 17,816 points in late morning trading after ending last week in the red.
The S&P 500 Index fell 4 points or 0.2% at 2088 points with all ten of its main sectors trading in the red. Technology stocks were the worst hit with Facebook leading the losses with a 1.1% decline.
The technology heavy Nasdaq Composite led the losses among the major indexes falling 15 points or 0.3% at 5,053 points.
“There is a fear of unknown, with people realizing that interest rates are not going to stay low forever. So, markets may stay range-bound and affected by good news for the rest of this year,” Bruce McCain, chief investment strategist at Key Private Bank, told Market Watch.
The May non-farm payrolls report released on Friday bolstered expectations that the Federal Reserve would begin raising short term interest rates later this year.
The report by the Labor Department sparked selloff in equities and bonds showing that investors would prefer lower rates to economic stability.
According to the findings of a Reuters’ poll, most economists expect the Fed to raise the interest rates in September as opposed to later in the year.
“Complacency, apathy and uncertainty are all among terms that may appropriately describe investor sentiment right now,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.
“Volatility is apt to increase in July and August as the market moves through the historical dog days of summer, waits for the second-quarter results and importantly transitions to a likely Fed move in September.
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