US stocks extend losses to 4th straight session as summer rally fizzles to end the month

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• US stocks fell Wednesday to mark a fourth consecutive session of declines.
• Cleveland Fed President Loretta Mester says policy makers should raise rates beyond 4% and deliver no rate cuts in 2023.
• Wall Street's major indexes closed August in the red.

US stocks fell Wednesday, locking in losses for the month of August, as investors weighed the prospect of the Federal Reserve continuing to raise interest rates into 2023 to bring down high inflation. 

Wall Street's major indexes fell for a fourth consecutive session. All but one of the S&P 500 industry sectors lost ground. The energy group fell alongside oil prices, which were under pressure after factory activity in China, a major oil importer, contracted in August. The Nasdaq Composite paced the August declines as it lost about 4%. Stocks pulled back from hefty gains in July that allowed indexes to pare their severe losses for the year. 

Investors rounded off August considering the view on interest rates from Cleveland Federal Reserve President Loretta Mester, who sits on the Fed's rate-setting committee. Mester, in prepared remarks for a Wednesday speech, said it's "necessary" for the central bank to raise the Fed Funds target rate to above 4% by early 2023 and to hold it there through that year.

Here's where US indexes stood at 4:00 p.m. on Wednesday: 

•  S&P 500: 3,955.00, down 0.78%
• Dow Jones Industrial Average: 31,510.43, down 0.88% (280.44 points)
• Nasdaq Composite: 11,816.20, down 0.56%

Stocks have been falling since Friday when Federal Reserve Chairman Jerome Powell signaled a higher-for-longer environment for interest rates during his speech in Jackson Hole. American households will experience "some pain" as the Fed slows the economy to pull down inflation from a 40-year high, he said. 

Investors also weighed ADP's private payrolls report on Wednesday that showed the US private sector added 132,000 new jobs in August. Economists surveyed by Bloomberg expected 200,000.

"So it begins. The labor market is cooling as private payrolls clearly showed a more conservative pace of hiring," Ed Moya, senior market analyst at foreign exchange firm Oanda, wrote in a note. "A slower pace of hiring still gives the Fed the greenlight for more aggressive rate hikes over the next couple of FOMC meetings."

Friday's US jobs report may show the addition of 293,000 jobs in August following the unexpectedly strong gain of 528,000 in July. 

Around the markets, meme-trader favorite and struggling retailer Bed Bath & Beyond dropped following its plans to offer stock, cut staff, and close stores. 

The market is in for another bottom before the end of 2022, according to Morgan Stanley's chief investment officer Mike Wilson. Meanwhile, Wells Fargo says US stocks could drop another 9% as "cracks" are starting to show in the market. 

Alibaba and JD.com reportedly will be among the first US-listed Chinese companies whose financial audits will face inspections after a deal was reached between US and Chinese authorities last week.

Oil prices fell. West Texas Intermediate crude lost 2.8% to $89.09 per barrel. Brent crude, the international benchmark, lost 2.8% to $96.53.

The 10-year Treasury yield rose 6 basis points to 3.16%. Gold fell 0.8% to $1,721.40 per ounce.

Bitcoin was 1.6% higher at $20,306.05.

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