Policymakers have sent mixed signals about the outlook, with some warning that price pressures could easily rise again, while others were more concerned about the health of the labor market.And Tuesday’s Labor Department report did little to clear the air, as job openings rose marginally in October but hiring remained subdued. In addition, a report from the National Federation of Independent Business (NFIB) found that companies plan to create new jobs in the near future.
“It looks like the market is going to see a somewhat less forgiving Fed at this point because of the vacancies,” said Jeff Schulze, head of economic and market strategy at ClearBridge.
According to CME’s FedWatch Tool, traders still estimate a roughly 87% chance of a 25 basis point rate cut on Wednesday. But Schulze said investors now expect “a greater chance of a pause after tomorrow’s rate cut.”
Justin Bergner, portfolio manager at Gabelli Funds, said the rally in U.S. Treasury yields also weighed on stocks. “It is not surprising that the stock rally would stall before the Fed and bond yields continue to rise,” Bergner said. U.S. 10-year Treasury yields were last up 4.18% on the day, on track for a fourth straight day of gains.
The Dow Jones Industrial Average fell 179.03 points, or 0.38%, to 47,560.29, the S&P 500 lost 6.00 points, or 0.09%, to 6,840.51 and the Nasdaq Composite gained 30.58 points, or 0.13%, to 23,576.49.
The small-cap Russell 2000 index hit an intraday record earlier on Tuesday before paring gains to 0.2%.
After rising nearly 1% earlier in the day, the S&P 500 banking index weakened before eventually falling 2% after JPMorgan Chase’s consumer and community banking chief Marianne Lake said the bank expects spending to rise to about $105 billion by 2026, largely driven by growth and volume-related costs.
JPMorgan shares closed 4.7% lower, marking the biggest single-day percentage drop since April 4.
Of the eleven industrial sectors in the S&P 500, five lost ground. Energy, which ended up rising 0.7%, was the biggest gainer, while healthcare fell almost 1% and was the biggest loser.
Trading in technology stocks was also choppy on Tuesday. US President Donald Trump said he would allow Nvidia, the leader in artificial intelligence chips, to ship H200 processors, the second most powerful AI chips, to China for a 25% fee on those exports. But according to a report from the Financial Times, Beijing would restrict access to those chips, while Chinese hardliners in Washington criticized the Trump administration for its decision.
Nvidia shares finished 0.3% lower, while the Philadelphia Semiconductor Index closed down 0.04%.
Investor interest in corporate spending on artificial intelligence infrastructure is likely to come under more scrutiny, with results from Oracle and Broadcom due later this week.
Traders also kept an eye on a bidding war between Paramount Skydance and Netflix over Warner Bros. Warner finished up 3.8%, while Paramount added 0.5% and Netflix fell 0.08%.
Elsewhere, shares of Campbell fell 5.2% after the packaged food maker said it was selectively raising prices to counter higher costs. AutoZone shares lost 7.2% after quarterly results missed estimates.
AutoZone, Campbell and JPMorgan were the S&P 500’s biggest percentage losers today.
On the NYSE, there were 209 new highs and 56 new lows. On the Nasdaq, 2,642 stocks rose and 2,137 fell as advancing issues outnumbered declining stocks by a 1.24-to-1 ratio. The S&P 500 posted 17 new 52-week highs and eight new lows, while the Nasdaq Composite posted 100 new highs and 74 new lows. On US stock exchanges, 14.50 billion shares changed hands, compared to the average of 17.34 billion over the past twenty sessions. (Reporting by Sinead Carew in New York, Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Tasim Zahid, Saumyadeb Chakrabarty and Aurora Ellis)
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