Nov 13 (The Street Press) – On Monday, Wall Street’s main indexes went down as investors were waiting for important inflation and economic data. This information will influence expectations about how long the Federal Reserve will maintain higher interest rates.
Big-name growth stocks, like Microsoft, Amazon.com, and Apple, faced a setback, dropping between 0.5% and 1.5% in early trade, driven by the rise in the benchmark U.S. 10-year Treasury yield.
Eight out of the 11 major S&P 500 sectors were in decline, with real estate stocks leading the way down by 1.2%. This week’s economic data and Federal Reserve officials’ speeches will offer insights into the path of interest rates, as expectations grow that the Fed has finished raising borrowing costs. Tuesday’s anticipated report is expected to reveal a drop in headline consumer prices to 3.3% in October from 3.7% in September, while core prices are forecasted to remain steady. According to Peter Cardillo, chief market economist at Spartan Capital Securities, a continued decline in the year-over-year number could signal that the Fed won’t raise rates in December and might be finished with their hiking campaign.
U.S. stock indexes made a robust recovery this month, boosted by better-than-anticipated earnings and optimism that U.S. interest rates are leveling off. The S&P 500 closed near eight-week highs on Friday, and the Nasdaq reached a two-month peak. Traders are currently indicating an 86% likelihood that the Fed will maintain interest rates in December. However, expectations for rate cuts have shifted from May to June, as per the CME Group’s FedWatch tool.
The cautious atmosphere intensified as Moody’s shifted the U.S. credit rating outlook from “stable” to “negative,” citing significant fiscal deficits and reduced debt affordability. Peter Cardillo noted, “With the absence of macro news and the strong rally that we had on Friday, the downgrade and the anticipation of the inflation data is inducing some selling this morning.” Additionally, a Republican stopgap spending measure, introduced by U.S. House of Representatives Speaker Mike Johnson to prevent a government shutdown on Friday, faced opposition from lawmakers in both parties.
At 9:41 a.m. ET, the Dow Jones Industrial Average was down 0.06% at 34,262.82, the S&P 500 was down 0.43% at 4,396.14, and the Nasdaq Composite was down 0.70% at 13,701.71. Medtech companies like Dexcom, Abbott, and Insulet saw gains between 2% and 5%, with analysts noting that data on cardiovascular benefits for Novo Nordisk’s weight-loss drug Wegovy is more favorable than anticipated for these companies.
Boosting the Dow, Boeing surged 5.1% following a report by Bloomberg News that indicated China is contemplating the resumption of purchases of 737 Max aircraft. On the NYSE, declining issues surpassed advancers with a ratio of 2.49-to-1, and on the Nasdaq, the ratio was 2.18-to-1. The S&P index marked 11 new 52-week highs and one new low, while the Nasdaq noted 19 new highs and 82 new lows.