Wall St. set for biggest monthly drop in more than three years

31-Aug (Reuters) — Wall Street was lower on Monday afternoon as investors worried that the Federal Reserve may start raising interest rates in September, although a rally in oil boosted energy stocks.

The market was poised for its worst monthly drop over three years after being pummeled in the past two weeks due to worries about the health of China’s economy and the timing of the first U.S. rate hike in almost a decade.

Comments on Saturday by Fed Vice Chairman Stanley Fischer added to fears that the central bank may raise rates when it meets next month.

Fischer said U.S. inflation would likely rebound as pressure from the dollar fades, allowing the Fed to raise interest rates gradually.

“What you see in the market today is caused by Fischer’s comments over the weekend. If they move in September, it’s going to cast a lot of doubt about where they will stop,” said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.

[source]

PG View: Meanwhile, it looks like gold will end the month nearly 4% higher.