U.S. Stock Market Dips Amidst Economic Data
NEW YORK – The U.S. stock market experienced a downturn on Tuesday as investors considered new economic data. This data has created uncertainty about the future direction of interest rates.
In afternoon trading, the S&P 500 fell by 0.6%, remaining slightly below its record high from last week. The Dow Jones Industrial Average decreased by 342 points, or 0.7%. The Nasdaq composite was down by 0.3%.
Treasury yields initially decreased following a report indicating the U.S. unemployment rate reached its highest level since 2021, despite employers adding more jobs than anticipated. A separate report showed stronger-than-expected revenue growth for U.S. retailers in October.
These mixed signals led to initial speculation that the Federal Reserve might prioritize job market concerns over inflation, potentially leading to interest rate cuts in the future. However, Treasury yields later fluctuated.
The Federal Reserve’s decisions on interest rates significantly impact Wall Street. Lower rates can stimulate the economy and investment prices, but could also contribute to inflation. An upcoming report on Thursday is expected to reveal continued increases in consumer prices.
A report released Tuesday suggested rising price pressures, with businesses experiencing rapid increases in average selling prices. Preliminary data from S&P Global also indicated a slowdown in overall business activity.
Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that tariffs are being widely blamed for higher prices, affecting both manufacturing and services.
The yield on the 10-year Treasury decreased to 4.15%, while the two-year Treasury yield fell to 3.48%.
Artificial intelligence (AI) stocks continued to drive market fluctuations.
Oracle increased by 1%, while Broadcom decreased by 0.1%. CoreWeave, a company specializing in AI chip rentals, fell by 5.4%. Concerns persist about the profitability and productivity of AI investments.
Pfizer decreased by 4.6% after providing a profit forecast for 2026 that fell short of some analysts’ expectations.
Kraft Heinz increased by 0.9% after announcing that Steve Cahillane would become CEO on January 1.
Stock markets abroad also experienced declines, with Japan’s Nikkei 225 dropping by 1.6% ahead of an expected interest rate hike by the Bank of Japan.
