U.S. stocks fell on Tuesday despite positive retail sales data as investors await the start of a highly anticipated Federal Reserve policy meeting expected to herald a rate cut.
The Dow Jones Industrial Average (^DJI) fell about 0.5%, coming off an eighth straight day of losses for the blue chip index. The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) also lost about 0.5%. The Nasdaq closed at a record high on Monday.
Markets are waiting for Fed policymakers to kick off their final meeting of the year, with almost total confidence that a 0.25% rate cut is coming on Wednesday. Some on Wall Street suspect this could be the last rate cut in a while as inflation proves to be stubborn. That is why the emphasis is on indications for interest rate developments next year – and in January in particular.
The yield on the 10-year Treasury note (^TNX) rose as much as 4.42%, the highest level in more than three weeks, amid growing expectations that the Fed would turn cautious next year.
Meanwhile, investors assessed a November retail sales reading to understand consumer health and the economy. Sales rose 0.7%, faster than expected 0.6% month-over-month gain, amid strong holiday spending.
Eyes are also on Nvidia (NVDA), amid a share price drop that is more than 10% lower than its record close in November. The chip giant’s shares fell more than 2% in early trading.
Elsewhere, crypto-linked stocks surged higher after bitcoin (BTC-USD) broke above $107,000 per token to keep its record rally going. Shares of Coinbase (COIN), Mara Holdings (MARA) and MicroStrategy (MSTR) rose.
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