Traders work on the trading floor of the New York Stock Exchange on April 1, 2024.
Brendan McDermid | Reuters
this Dow Jones Industrial Average Stocks fell for a second straight day, extending a sluggish start to the season on Wall Street as bond yields rose and traders lowered expectations that the Federal Reserve will cut interest rates in June.
The 30 stocks in the Dow Jones Index fell 420 points, or 1.1%. The benchmark index fell more than 500 points at session lows.this S&P 500 Index down 0.9%, Nasdaq Index down 1.2%.
Stocks got off to a rocky start to the second quarter as sticky inflation data from the end of last week and some strong economic data on Monday pushed yields higher and reduced the chances of a rate cut by the Federal Reserve in June. The 10-year Treasury yield jumped to its highest level since Nov. 28, while oil prices also hit a five-month high on Tuesday, adding to inflationary pressures.
“What we’re seeing is a one-for-two hit from continued hot inflation numbers combined with profit-taking,” said Greg Bassuk, CEO of AXS Investments. As “market gains in the first quarter were very significant… … We should have some adjustments. But we think, realistically, investor sentiment on interest rates will continue to move higher over the longer term as well.”
The S&P 500 rose 10% in the first quarter, its best start to the year since 2019, as investors bet inflation will fall enough for the Federal Reserve to start cutting interest rates while the economy continues to grow.The Nasdaq rose 9% in the first quarter on gains in artificial intelligence-related stocks, such as Nvidia.
Sarat Sethi, managing partner at Douglas C. Lane & Associates, was not affected by the sell-off and said it was a “natural digestion” of the stock market’s rapid rise. Sethi said the market remains strong and pointed to some opportunities outside of technology, such as energy, one of two sectors that rose on Tuesday.
Ahead of Tuesday’s market decline, core personal consumption expenditures price index data released on Friday showed an annual increase of 2.8% in February, unchanged from the 2.9% in December and January, still some way away from the Federal Reserve’s 2% inflation target. distance. On Monday, the Institute for Supply Management’s manufacturing index expanded after 16 consecutive months of contraction.
According to Fed futures trading, the probability of a rate cut in June has now dropped to about 58.8%, down from about 70% a week ago. The question now is whether the momentum at the start of 2024 can be sustained if the Fed sticks to rates.
Tesla The company’s shares plunged 5.5% after reporting disappointing first-quarter deliveries.Technology related giants Nvidia, letter and MicrosoftSome of this year’s big winners are down about 1%.
Health insurance stocks fall after Centers for Medicare and Medicaid Services finalizes decision 2025 Rate Announcement Medicare Advantage and prescription drug coverage. Government payments for these programs are expected to increase by 3.7% year-on-year through 2025, in line with previously proposed rates. humana lost 14%, while UnitedHealth down 7.3% CVS Health plunged 8.7%.
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