Stocks Dive On Fears Of Hawkish Fed; Treasury Yields Rise, Bitcoin Tumbles To $60,000: What's Driving Markets Tuesday?
Investor apprehension grips Wall Street with major indices showing midday losses on Tuesday in New York trading, ahead of the Federal Reserve’s potentially hawkish pivot in Wednesday’s meeting.
The S&P 500 retraced 0.9% after a 2-day positive streak, with the tech-heavy Nasdaq 100 slightly underperforming, down 1.1%. Small caps suffered larger losses, with the iShares Russell 2000 ETF (NYSE:IWM) down 1.5%.
The stock market faced renewed pressure as economic data revealed a decline in consumer confidence and persistent wage pressures, putting further pressures on the Federal Reserve.
The Bureau of Labor Statistics reported a 1.2% increase in the employment cost index for the first quarter of 2024, surpassing market expectations of 1% growth and accelerating from the previous three-month period’s 0.9% rise. In April, the Conference Board consumer confidence index dropped from 103.1 to 97 points, falling short of forecasts for a rise to 104.
Bonds provided little refuge to investors as yields surged in response to comments from U.S. Treasury Secretary Janet Yellen, who voiced concerns about the deficit trajectory and proposed substantial measures to address budgetary gaps.
Yields on the 2-year Treasury note breached the psychological 5% threshold, aiming for the highest close since mid-November 2023. The U.S. dollar index (DXY), as tracked Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), rose 0.6%.
Gold tumbled 1.7%, pressured by higher yields and stronger greenback. Bitcoin (CRYPTO: BTC) plummeted over 5%, on track for its worst daily performance in four weeks amid weak sentiment on cryptocurrencies.
Tuesday’s Performance In Major U.S. Indices, ETFs
Major Indices | Price | 1-day %chg |
S&P 500 | 5,070.03 | -0.9% |
Dow Jones | 37,992.61 | -1.0% |
Nasdaq 100 | 17,588.95 | -1.1% |
Russell 2000 | 1,982.84 | -1.6% |
Updated at 12:39 p.m. EDT
The SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.9% to $505.30, the SPDR Dow Jones Industrial Average (NYSE:DIA) fell 1.1% to $379.75 and the tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) fell 1.1% to $428.01, according to Benzinga Pro data.
Sector-wise, the Utilities Select Sector SPDR Fund (NYSE:XLU) outperformed, up 0.1%, marking the sole positive performance among the eleven S&P 500 sectors. The Energy Select Sector SPDR Fund (NYSE:XLE) was the major laggard, down 2.1%.
Tuesday’s Stock Movers
Tesla Inc. (NASDAQ:TSLA) fell 5%, following a 15% surge Monday on the heels of news potentially clearing the full self-driving service in China. Goldman Sachs tempered some of the excitement in a note on Tuesday.
Eli Lilly Company (NYSE:LLY) rose 4.6%, its strongest one-day gain since early February, as the pharmaceutical giant hiked 2024 revenue forecast.
Other stocks reacting to earnings were Coca-Cola Company (NYSE:KO), down 0.5%; McDonald’s Corp. (NYSE:MCD), down 0.2%; Eaton Corp. (NYSE:ETN), down 3%; Marathon Petroleum Corp. (NYSE:MPC), down 7.5%; Trane Technologies plc (NYSE:TT), up 5.7%; PayPal Holdings Inc. (NASDAQ:PYPL), up 1.2%; 3M Company (NYSE:MMM), up 3.2%; Arch Capital Group Ltd. (NASDAQ:ACGL), up 2.8% and GE Healthcare Technologies Inc. (NASDAQ:GEHC), down 13.4%.
Caterpillar Inc. (NYSE:CAT) fell 4.2% on news that the company will delist from European exchanges.
Warner Bros. Discovery Inc. (NASDAQ:WBD) fell 9.3%, hitting the lowest level since February 2009, after reports that the company could lose NBA TV rights to rival Comcast Corp.’s (NASDAQ:CMCSA) NBCUniversal and Amazon.com Inc. (NASDAQ:AMZN)
Notable names reporting after the close are Advanced Micro Devices, Inc. (NASDAQ:AMD), Amazon.com, Inc., ONEOK, Inc. (NYSE:OKE), Pinterest Inc. (NYSE:PINS), Starbucks Corp. (NASDAQ:SBUX), Skyworks Solutions, Inc. (NASDAQ:SWKS), Unum Group (NYSE:UNM). Super Micro Computer, Inc. (NASDAQ:SMCI), Stryker Corporation (NYSE:SYK), Renaissancere Holdings Ltd. (NYSE:RNR), Prudential Financial, Inc. (NYSE:PRU), Diamondback Energy, Inc. (NASDAQ:FANG), LPL Financial Holdings Inc. (NASDAQ:LPLA), Clorox Co (NYSE:CLX) and Chesapeake Energy Corp (NASDAQ:CHK).
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