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US stocks closed lower on Tuesday, marking a three-day decline, as fresh employment data backed views for a hawkish Federal Reserve.
Indexes gave up early gains and reversed lower after job openings unexpectedly increased to 11.2 million in July, indicating the labor market remains tight. The report came as investors continue to reel from Fed Chairman Jerome Powell’s speech at Jackson Hole on Friday, when he reiterated the Fed’s resolve to tame inflation by raising interest rates and reducing its $9 trillion balance sheet.
The Fed’s balance sheet reduction program is set to accelerate to $95 billion per month in September, and that could remove liquidity from the market as it rolls off its Treasury and mortgage-backed security holdings.
Here’s where US indexes stood at the 4:00 p.m. ET close on Tuesday:
S&P 500: 3,986.17, down 1.10%
Dow Jones Industrial Average: 31,790.87, down 0.96% (308.12 points)
Nasdaq Composite: 11,883.
