NEW YORK (AP) — Stock prices on the New York Stock Exchange fell Monday after the latest sign that the U.S. economy remains strong, which could delay interest rate cuts to those that Wall Street aspires to.
The S&P 500 lost 15.80 points, or 0.3%, to close at 4,942.81 from Friday’s all-time high. The Dow Jones Industrial Average fell 274.30 points, or 0.7%, to end at 38,380.12, while the Nasdaq Composite fell 31.28 points, or 0.2%, to 15,597.68.
The corporate reporting season is nearing its midpoint, and about half of the companies in the S&P 500 have released their latest results, including some of the most influential in the market. Estee Lauder rose 12% after reporting revenue and earnings above analysts’ expectations. Meanwhile, McDonald’s fell 3.7% despite reporting better-than-anticipated earnings.
Companies that have not reached analysts’ estimated revenues during the current season have seen their share prices hurt more than usual, according to Bank of America strategists.
Overall, stock prices were under pressure from a further rise in bond market yields. They rose after traders on Wall Street pushed back their expectations for when the Federal Reserve will begin cutting its main interest rate.
The Fed has raised its federal funds rate to its highest level since 2001 with the goal of reducing high inflation. High rates intentionally slow the economy by making credit more expensive and affecting investment prices.
Fed Chair Jerome Powell reiterated in an interview Sunday that the central bank could cut interest rates three times this year as inflation has cooled. But in his interview with “60 Minutes” he indicated again that these reductions are unlikely to begin in March, as many operators expected.
At Goldman Sachs, economist David Mericle still predicts the cuts will begin in May. After Sunday’s interview, he sees a greater chance that the reductions will come later and more pronounced.
The yield on the 10-year Treasury bond rose from 4.09% to 4.16%.
Associated Press writers Matt Ott and Zimo Zhong contributed to this report.
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2024-02-05 23:24:32
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