US Stocks See Slight Decline Amid Economic Concerns
NEW YORK, Dec 1 – US stocks ended the day slightly lower on Monday, primarily influenced by rising US Treasury yields and ongoing economic reports. Investors are gearing up for the Federal Reserve’s policy announcement scheduled for next week.
According to a report from the Institute for Supply Management, US manufacturing has contracted for the ninth consecutive month in November, as factories continue to deal with weak orders and escalating prices, largely due to the effects of tariffs.
Market expectations seem to have largely accounted for a potential rate cut from the Fed following its meeting on December 10th. Data from CME indicates there’s an 85.4% chance of a 25 basis point decrease.
Quote from Joe Saluzzi, a partner and co-founder at Themis Trading, spoke on the market’s current state: “The market is still clearly driven by earnings. We’ve completed earnings season, and now it’s awaiting guidance from the Fed,” he noted. “I think the upward trend might still continue, albeit not as swiftly, though challenges may arise as the year wraps up.”
As for the numbers, the Dow Jones Industrial Average sank by 0.90% to close at 47,289.33. The S&P 500 fell by 0.90%, dropping 427.09 points, while the Nasdaq Composite decreased by 0.38%, closing at 23,275.92. Despite ongoing caution from many policymakers, some dovish signals lately have ignited hopes for monetary easing in the near term, particularly with potential changes in Fed leadership looming.
Moreover, investors are anxious about a delayed report on the Personal Consumption Expenditure Price Index, the Fed’s favored inflation measure, which is set to be released on Friday. On Monday, US Treasury yields rose, aligning with a fall in Japanese and European government bonds. While markets are anticipating rate cuts, comments from Bank of Japan Governor Kazuo Ueda indicate a possible future rate hike.
The uptick in yields has impacted certain S&P 500 sectors like real estate and utilities. Notably, cryptocurrency stocks also took a hit; Coinbase saw a drop of 4.8%, while other crypto-related equities followed suit, attributed to Bitcoin’s decline, which dipped nearly 6%, even slipping below $85,000 temporarily. The overall cryptocurrency market has seen a staggering loss of over $1 trillion since its peak value of around $4.3 trillion.
In contrast, some retailers were in focus this Cyber Monday, expected to generate $14.2 billion in online sales. Both Walmart and Target saw rises in their stock prices, up 0.9% and 0.8%, respectively. Meanwhile, Synopsys experienced a surge as Nvidia announced a significant $2 billion investment in semiconductor design software.
As the day concluded, declining stocks were significantly higher than advancing ones, marking a ratio of 1.86 to 1 on the New York Stock Exchange and 2.33 to 1 on Nasdaq. The S&P 500 Index recorded 17 new 52-week highs versus one new low, while Nasdaq noted 76 new highs and 78 new lows. Trading volume across US exchanges was recorded at 15.64 billion shares, slightly below the average of 18.64 billion shares over the past 20 trading days.
