WALL STREET ENDS LOWER DUE TO INFLATION FEARS – Expectations are pushed back on Central Bank’s first interest rate reduction this year
U.S. stocks closed down after a batch of upbeat economic data raised concerns that an inflation rebound could slow down the Federal Reserve’s pace of monetary policy easing.
Stocks gave up early gains after a Labour Department report showed job openings unexpectedly increased in November, while a separate report said services sector activity accelerated in December with a measure tracking input prices surging to a near two-year high.
Benchmark 10-year Treasury yields hit an eight-month high at 4.677% after the data pointed to a strong economy.
Signs of continued resilience in the economy have pushed back expectations on when the central bank can deliver its first interest rate reduction this year. Traders now see the next cut more likely in June and the Fed staying on hold for the rest of 2025, according to the CME Group’s FedWatch tool.
The S&P 500 lost 66.35 points, or 1.11%, to end at 5,909.03 points, while the Nasdaq Composite lost 375.30 points, or 1.89%, to 19,489.68. The Dow Jones Industrial Average fell 178.20 points, or 0.42%, to 42,528.36.
