S&P 500 falls for a fourth day, putting summer market comeback in doubt

Stocks fell on Wednesday as Wall Street struggled to snap a three-day losing streak and investors continued to digest inflation-fighting comments from Federal Reserve officials.

The Dow Jones Industrial Average fell 115 points, or 0.4%. The S&P 500 moved lower by 0.3% and the Nasdaq Composite lost 0.4%.

All of the major averages are on track to end what has been a strong month for stocks lower. Markets had been selling off heavily since Friday after hawkish remarks from Federal Reserve Chair Jerome Powell. Most recently, Cleveland Fed President Loretta Mester said she sees benchmark interest rates rising above 4% by early next year, while New York Fed President John Williams called for “somewhat restrictive policy to slow demand.”

The sell-off on Wall Street rolled into Tuesday, with the Dow Jones Industrial Average sliding nearly 1%. The Nasdaq Composite dropped 1.1%, and the S&P 500 slumped 1.1%, falling below the 4,000 mark for the first time since late July. All the major averages were on pace to finish August with losses.

“This volatility is really healthy and constructive,” Jeff Kilburg, chief investment officer of Sanctuary Wealth, told CNBC. “It doesn’t feel good, and the velocity that the Fed has injected into this de-risking process has taken the breath away of a lot of investors but… There are a lot of signs that are more optimistic than negative” – like the rise in Treasury yields, he said.

“For the market to go from 3,600 to 4,300 in 19 trading sessions, that is not sustainable,” he added. “Seeing the market come back and the S&P 500 filling volume around 4,000 is really constructive and allows us to have a foundation taking another leg higher  with the backdrop of earnings season which is better than expected and the consumer sentiment slowly upticking.”