by Noel Randwich and Ankika Biswas

(Reuters) – Wall Street closed lower on Tuesday after evidence of a cooling economy raised concerns that the Federal Reserve’s campaign to rein in decades of high inflation could be in deep trouble.

All three major indexes fell as US job openings fell to their lowest level in nearly two years in February, suggesting the labor market was cooling, while factory orders fell for a second straight month.

Monday’s data also pointed to a weakening in US manufacturing activity.

Sal Bruno, chief investment officer at IndexIQ in New York, said: “The number of job openings has decreased, leading people to worry that hiring is going too slow, and that will be bad for the economy. It reflects fears of a recession.” enhances.”

Bank stocks soared after JPMorgan Chase & Co (NYSE: ) CEO Jaime Dimon warned in a letter to shareholders that the US banking crisis is ongoing and its effects will be felt for years.

Bank of America (NYSE:) and Wells Fargo (NYSE:) & Co fell more than 2%, and the Bank index fell 1.9%.

Seven of the 11 S&P 500 sector indexes declined, led by industrials with a 2.25% decline, followed by energy with a 1.72% loss.

The S&P 500 closed lower for the first time in a week, falling 0.58% to end the session at 4,100.68.

The Nasdaq was down 0.52% at 12,126.33, while the Nasdaq was down 0.59% at 33,403.04.

Kamla Inc (NYSE:), seen as a bellwether for the industrial sector, fell 5.4%.

Heavyweight chipmaker Nvidia (NASDAQ: ) declined 1.8%, which weighed more heavily on the S&P 500’s decline than any other stock.

Healthcare and utilities, which many investors expect to hold up better during the economic downturn, were among some of the S&P 500 sector indexes to lose Tuesday.

Graphic: Odds Point to No May Rate Hike https://www.reuters.com/graphics/USA-RATES/FEDWATCH/zdpxdayyrpx/chart.png

Trading in interest rate futures suggests that bets are now tilted toward a pause by the Fed in May, according to CME Group (NASDAQ: ) , with the data placing the 25-basis point rate cut at 42%, compared with nearly 60% before the data. There is a possibility of increase. Fedwatch Tool.

So far in 2023, the S&P 500 is up about 7% and is down about 15% from its record high in January 2022.

Graphic: Busiest Traded S&P 500 https://fingfx.thomsonreuters.com/gfx/mkt/xmpjkjgozvr/SPX_by_busiest_trades.png

Virgin Orbit Holdings Inc fell 23.2% after the satellite launch company filed for Chapter 11 bankruptcy after failing to secure long-term financing.

Shares of AMC Entertainment (NYSE: ) Holdings Inc. plunged 23.5% after the movie theater chain said it agreed to settle litigation and proceed with converting its preferred stock into common shares.

Shares of Digital World Acquisition Corp fell 8% after the SPAC linked to former US President Donald Trump delayed filing its annual financial report.

Volume was relatively light on US exchanges, with 10.3 billion shares traded compared to an average of 12.8 billion shares over the past 20 sessions.

In the US stock market, declining stocks outnumbered rising stocks by a 2.2-to-one ratio.

The S&P 500 recorded 14 new highs and one new low; The Nasdaq recorded 64 new highs and 238 new lows.