-
Stocks fell sharply as investors readjusted their rate cut expectations ahead of the latest FOMC meeting.
-
The latest labor cost data has reinforced fears of a surging economy and persistent inflation.
-
The decline in stocks only compounds April’s losses, ending a five-month winning streak.
US stocks plunged on Tuesday as investors received a fresh dose of inflation data ahead of the Federal Reserve’s next policy decision.
The benchmark S&P 500 fell more than 1% after quarterly labor costs came in higher than expected. The labor cost index, a measure of wages and benefits, rose 1.2 percent versus a consensus of 1 percent, the Bureau of Labor Statistics reported.
For the Fed, this further limits its ability to cut interest rates this year, and futures markets are now just waiting a rate cut in December. Investors will be watching for comments from the Fed after the FOMC meeting ends on Wednesday.
“Chairman Powell’s policy statement and comments at the press conference will reiterate the Fed’s determination to return inflation to its 2% target. Barring a major crisis, a rate cut appears off the table before September, and even that is less likely than it seemed a few weeks ago, given recent data demonstrating widespread increases in prices for services, housing and labor costs in early 2024. ” said Bill Adams, chief economist at Comerica Bank, in a written commentary.
The subsequent decline in stocks only compounded the market’s losses in April, making it the first month of 2024 to end in the red. Its 3.7% drop ended an upward trend that has extended since November.
Meanwhile, share McDonalds fell as much as 3.8%, after its earnings report missed estimates. Amazon will publish his quarterly results after the closing bell on Tuesday.
Among other notable actors, Ceasefire talks between Israel and Hamas Brent crude fell 2.6% throughout the day.
Here is where the American indices stood at the 4:00 p.m. close on Tuesday:
Here’s what else is happening today:
In commodities, bonds and cryptocurrencies:
-
Oil prices have fallen. West Texas Intermediate Crude oil lost 1.09% to $81.92 per barrel. Brent crudethe international benchmark, fell 2.6% to 86.14 dollars per barrel.
-
Gold fell 1.85% to $2,295.4 an ounce.
-
The 10-year Treasury yield jumped seven basis points to 4.684%.
-
Bitcoin fell 5.4% to $60,358.
Read the original article on Business Insider
