The S&P 500 fell on Tuesday as investors focused on data showing a slowing economy ahead of this week’s US Federal Reserve meeting in Jackson Hole, Wyoming.

The S&P 500 fluctuated between modest gains and losses for much of the session after data showed that private sector business activity in the United States contracted for a second straight month in August, with particular softness in the services sector as demand weakened amid inflation and tighter financial conditions.

The S&P Global Composite Purchasing Managers’ Index, or PMI, fell to 45 in August, the lowest reading since February 2021, from 47.7 in July.

A reading below 50 indicates reduced activity.

Stocks fell in late sessions ahead of the central bank’s meeting in Jackson Hole, where Federal Reserve Chairman Jerome Powell on Friday is expected to reinforce a firm commitment to end inflation, which is hitting four-decade highs.

Traders are divided between expectations for a 50 basis point hike by the central bank and a 75 basis point hike after several policymakers recently abandoned expectations of a dovish reversal and emphasized the Fed’s commitment to tackling inflation.

“What we saw last week was the realization that the Fed could raise interest rates by 75 basis points in September,” said Jake Dollarhyde, chief executive of Longbow Asset Management in Tulsa, Oklahoma. “Market Fears Powell Will Return to Hawkish Position.”

The benchmark 10-year bond yield rose to its highest level since late July.

Zoom Video Communications Inc tumbled after the former stay-at-home stock darling cut its full-year profit and revenue forecast.

After a rough start to the year, markets had rallied since mid-June on hopes that inflation had peaked, but that summer rally stalled last week amid renewed concerns about an aggressive Fed tightening.

The S&P 500 lost 9.34 points, or 0.23%, to 4,128.65, while the Nasdaq Composite lost 0.27 points, or 0.00%, to 12,381.30.

The Dow Jones Industrial Average fell 154.39 points, or 0.47%, to 32,903.09.

The S&P 500 energy index rose, tracking a jump in crude oil prices as tight supply came back into focus.

Macy’s Inc rose after the retailer beat quarterly profit estimates, while Palo Alto Networks Inc rose after the cybersecurity firm posted upbeat quarterly results and announced a stock split plan.

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