Wall Street indexes traded lower on Tuesday after Federal Reserve Chairman Jerome Powell said more evidence was needed before cutting interest rates, while gains in Tesla shares kept losses in check.
Tesla leapt 7.9% to its highest since January after the company reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter.
Stocks also pared initial losses as Fed Chair Powell told a panel that recent economic data represented “significant progress,” though noting the central bank needed to see more before changing policy.
Microsoft and Apple reversed early losses, rising 0.1% and 0.8%.
However, AI chip leader Nvidia dropped 2.3% and tech leaders Alphabet and Meta Platforms fell 0.4% and 0.5% as benchmark 10-year Treasury yields hovered around multi-week highs.
“Inflation is continuing to remain sticky, interest rates continue to remain high, there seems to be a bit of rotation or at least profit taking going on in some of these names that have done really well,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
Wall Street Week Ahead: Jobs, inflation data may break the US Treasury market out of narrow range
Pavlik also cited investors looking to adjust portfolios ahead of the U.S. presidential election, as the possibility increases of a second term for former President Donald Trump.
The job openings and labor turnover survey, or JOLTS, showed job openings rose to 8.14 million in May, versus expectations for 7.910 million.
The data is the first in this week’s series of U.S. jobs reports, particularly Friday’s closely watched release of June non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates.
As recent data signals a renewed moderation in inflation and some signs of economic weakness, market participants are holding on to their bets of around two interest rate cuts by this year-end, seeing a 69% chance of easing starting in September, as per LSEG’s FedWatch data.
Tesla’s gains lifted the S&P 500 consumer discretionary susbsector, while the health sector led declines.
At 10:11 a.m. ET, the Dow Jones Industrial Average was down 38.01 points, or 0.10%, at 39,131.51, the S&P 500 was down 7.23 points, or 0.13%, at 5,467.86, and the Nasdaq Composite was down 19.51 points, or 0.11%, at 17,859.79.
Trading volumes are expected to be light throughout the week, with the equity market closing early on Wednesday and shut all day Thursday for U.S. Independence Day.
Among stocks, the U.S. listing of Novo Nordisk lost 3.6% after U.S. President Joe Biden and Senator Bernie Sanders called on the Danish drugmaker to cut prices of its Ozempic and Wegovy drugs. Rival Eli Lilly dropped 3.2%.
Paramount Global climbed 3.9% after billionaire Barry Diller’s digital-media conglomerate IAC is exploring a bid to take control of the media giant.
Advancing issues outnumbered decliners by a 1.66-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and four new lows, while the Nasdaq recorded 22 new highs and 89 new lows.