Stock Market Today: Dow Ends Wild Ride in Red as Bears Strengthen Grip

By Yasin Ebrahim

Investing.com -- The Dow slipped further into bear-market territory Tuesday, as investors continue to digest a wave of remarks from Federal Reserve members pointing to further rate hikes that many fear could tip the economy into recession.  

The Dow Jones Industrial Average slipped 0.4%, or 125 points, and the Nasdaq fell 0.2% and the S&P 500 fell 0.1% and had slipped to nearly two-year low intraday. All three-major averages fell deeper in bear-market territory.

Tech played dominated market direction as a strong start on dip-buying action was offset from rise in Treasury yields as investors digested data pointing a stronger consumer. 

Apple Inc (NASDAQ:AAPL) eased from session highs to end the day slightly above the flatline, while Alphabet Inc Class A (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) pared gains to close in the red.

Twitter (NYSE:TWTR), meanwhile, rose 1% after Elon Musk’s deposition by Twitter lawyers was rescheduled for Oct. 6-7.

The delay comes ahead of a trial, set for Oct. 17, that will decide the “ultimate fate of the $44 billion Twitter deal,” Wedbush said. “Twitter's stock will continue to trade on deal odds as the long and ugly courtroom battle now begins to play out in Delaware courts,” it added.

Data showing stronger consumer confidence reinforced expectations that the Federal Reserve is likely to stay the course and lift its benchmark rate above 4% by the end of the year.

The Conference Board’s consumer confidence gauge rose to 108.0 in October from 103.68 in September, beating economists’ forecast for a reading of 104,5.

Consumer sentiment is a leading indicator of consumer spending, which plays a major role in overall economic activity.

The pick-up in consumer confidence, which was driven by falling gas prices, Pantheon Macroeconomics said, “might not last as people absorb the hit from the recent drop in stock prices and the Fed’s latest rate hikes, with the promise of more to come.”

Federal Reserve Bank of St. Louis President James Bullard indicated on Tuesday that the Fed had more work to do, calling for further rate hikes that would need to stay at higher rate for “some time to make sure we’ve got the inflation problem under control.”

Federal Reserve Bank of Minneapolis President Neel Kashkari said the current pace of rate hikes was "appropriate," and reiterated the Fed's commitment to bringing down inflation. 

Energy stocks recovered from a rout a day earlier, supported by a 2% rise in oil prices rose on bets of supply disruptions in the U.S. Gulf of Mexico as Hurricane Ian is expected to make landfall in Florida on Wednesday.

Valero Energy Corporation (NYSE:VLO), Marathon Petroleum Corp (NYSE:MPC), and Baker Hughes Co (NASDAQ:BKR) led the gains in energy.

Cruise line stocks including Carnival Corporation (NYSE:CCL), Royal Caribbean Cruises (NYSE:RCL), and Norwegian Cruise Line (NYSE:NCLH) were boosted by news that Canada would end Covid-19 travel restrictions next month.

In other news, electric motorcycle maker LiveWire Group, a subsidiary of Harley-Davidson (NYSE:HOG), which went public through a special-purpose acquisition company, reversed gains on its debut to close more than 12% lower.