Wall St. Drifts Lower as China Worries Hit World Markets

Wall Street edged lower Wednesday following a rally that sent it roaring 16% higher for the year so far. The S&P 500 fell 8.77 points, or 0.2%, to 4,446.82, edging down from its highest level since April 2022. The Dow Jones Industrial Average fell 129.83 points, or 0.4%, to 34,288.46. The Nasdaq composite fell 25.12 points, or 0.2%, to 13,791.65. Other markets around the world fell more sharply following the latest discouraging signal from China's economy. Growth in China's services industry slowed by more than expected last month. It's the latest evidence showing the world's second-largest economy is stumbling in its recovery following the removal of anti-COVID restrictions.

The US economy, meanwhile, has remained stronger than many investors feared. It's defied predictions for a recession because of a job market that's remained remarkably solid despite much higher interest rates meant to bring down inflation, the AP reports. A report on Wednesday showed growth for US factory orders held steady in May, though economists expected to see an acceleration. Hope is rising that inflation is cooling enough to get the Federal Reserve to soon stop its hikes to rates, which undercut inflation by slowing the entire economy. At its last meeting, the Fed decided to hold rates steady, the first time in more than a year that it refrained from hiking rates.

Some Fed officials wanted to raise rates at that last meeting, according to minutes from the June meeting released Wednesday. The vote was unanimous, though, to hold the federal funds rate steady within a range of 5% to 5.25%, up from virtually zero early last year.

• On Wall Street, shares of UPS fell 2.4% as the company tries to reach a deal with the Teamsters union representing about 340,000 of its workers. Their current contract expires at the end of the month, and Teamsters members last month voted in favor of a strike authorization.
• Companies that do a lot of business in the China region were also weak. Las Vegas Sands and Wynn Resorts, which get significant chunks of revenue from Macau, both fell at least 4.5%.
• On the winning side was Meta Platforms. The parent company of Facebook, Instagram and WhatsApp is poised to unveil a new app, Threads, that appears to mimic Twitter. It rose 2.9%, adding to a stellar year where it's already soared 145%.

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