Technology stocks have weighed on Wall Street as investors grew cautious ahead of the Federal Reserve’s interest rate decision this week following a stronger-than-expected retail sales reading.
US retail sales increased more than expected in November amid an acceleration in motor vehicle purchases, consistent with strong underlying momentum in the economy as the year winds down.
“It’s just further evidence that at an aggregate level, the US consumer is still in great shape … that just proves that the US economy is on strong footing,” said Eric Sterner, chief investment officer for Apollon Wealth Management.
The US 10-year Treasury note yield inched higher, hovering near a three-week high of 4.428 per cent and pressuring rate-sensitive equities, as market bets strengthened on a more cautious Fed in 2025.
In early trading on Tuesday, the Dow Jones Industrial Average fell 231.55 points, or 0.53 per cent, to 43,487.22, the S&P 500 lost 28.68 points, or 0.47 per cent, to 6,045.40 and the Nasdaq Composite lost 97.40 points, or 0.48 per cent, to 20,078.88.
The CBOE Volatility Index, Wall Street’s “fear gauge,” rose above 15 for the first time in nearly three weeks.
Nine of the 11 S&P 500 sectors were lower with energy stocks down 1.6 per cent while financials and information technology followed with a 0.9 per cent and 0.6 per cent loss respectively.
Rate-sensitive megacap and growth stocks were mixed, with Nvidia in the lead, down 3.5 per cent and Amazon.com losing 1.2 per cent.
Tesla was up marginally after Mizuho upgraded the electric-vehicle maker’s stock to “outperform” from “neutral” and hiked its price target by $US285 to $US515.
“This will be the second year in a row of the S&P delivering returns of over 20 per cent. And that’s only a third time that’s happened in the last century, so I think there’s some profit taking,” Sterner said.
Market focus stayed on the Fed’s monetary policy decision on Wednesday where a 25 basis point cut is all but priced in, and the “dot plot” with policymakers’ rate forecasts will be high up on investors’ radar.
However, traders increasingly expect the US central bank to be more cautious in 2025, as economic indicators point to continued resilience and inflation remains persistent.
Wall Street had a fairly strong session on Monday, where the Nasdaq closed at a record high and the S&P 500 gained ground.
Still, US stocks remain on track to end December on a positive note with the S&P 500 set for its best year since 2019 with an over 27 per cent year-to-date rise, powered by gains in technology companies, Fed rate cuts and optimism on the impact of incoming president Donald Trump’s corporate policies.
Crypto-focused stocks continued to rally as bitcoin surpassed $US107,000.
MARA Holdings gained 1.8 per cent and Riot Platforms rose 1.4 per cent.
Pfizer gained 4.1 per cent after the drug maker forecast 2025 profit roughly in line with Wall Street expectations.
Declining issues outnumbered advancers by a 2.38-to-1 ratio on the NYSE and by a 1.33-to-1 ratio on the Nasdaq.
The S&P 500 posted six new 52-week highs and 16 new lows while the Nasdaq Composite recorded 41 new highs and 71 new lows.
https://thewest.com.au/business/markets/wall-street-falls-after-us-retail-sales-data-released-c-17118660
