Stocks on Wall Street slipped on both sides of the flatline Tuesday morning amid the year’s best rally even as the market found renewed confidence in the Federal Reserve ending its rate hiking campaign this year.
The tech-heavy Nasdaq Composite (^IXIC) ticked up by about 0.3%, continuing on a win-streak path, while the benchmark S&P 500 (^GSPC) edged down by 0.06%. The Dow Jones Industrial Average (^DJI) decreased by 0.1% or roughly 30 points.
Signs of a weaker US economy suggested to the market that the Fed could ease up on its tightening campaign. But investors were reassessing those hopes after Minneapolis Fed president Neel Kashkari said on Monday the central bank likely has more work ahead of it to control inflation.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
“There was quite a bit of euphoria at the end of last week on the belief that the Fed is done, the jobs market is slowing, that the US economy is going to experience a soft landing,” Michael Hewson, chief market analyst at CMC Markets UK, told Reuters. “People have started to become a bit more clear-eyed. There is the risk that the Fed could rise again.”
Investors will listen out for hints to policymakers’ thinking when the heads of the Kansas City and Dallas Feds speak on Tuesday, and then when Chair Jerome Powell steps up later in the week.
The fresh Fed doubts clouded the outlook for oil, helping push WTI crude prices below $80 a barrel for the first time in over two months despite the prospect of Saudi and Russian supply cuts. West Texas Intermediate crude futures (CL=F) and Brent crude futures (BZ=F) both sank about 2.7%, to $78.68 and $82.94 a barrel, respectively.
Also dragging on oil was trade data showing China’s drop in exports unexpectedly accelerated in October, a sign of flagging overseas demand, while its imports rose. But there was a bright spot for the world’s second-biggest economy, as the IMF upgraded its GDP growth forecasts for the country this year and next.
In corporate news, WeWork (WE) on Monday filed for bankruptcy after the once most valuable US startup grappled with expensive leases. Its shares have fallen about 98% this year.
Meanwhile, earnings season continues with reports from Uber (UBER) and Rivian (RIVN) on Tuesday’s docket, ahead of the closely watched Disney (DIS) results due Wednesday.
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Stocks open mixed as momentum fades
Wall Street couldn’t keep up the surge that fueled last week’s rally, as pessimism over the potential for future rate hikes overtook hopes of an end to the Fed’s tightening campaign.
The tech-heavy Nasdaq Composite (^IXIC) ticked up by about 0.3%, continuing on a win-streak path, while the benchmark S&P 500 (^GSPC) edged down by 0.06%. The Dow Jones Industrial Average (^DJI) decreased by 0.1% or roughly 30 points.
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KStock futures lose ground as Fed rate hopes dwindle
The rally in US stocks was poised to lose momentum on Tuesday as confidence in a rate-hike pause by the Federal Reserve started to seep away.
Futures on the Dow Jones Industrial Average (^DJI) were down 0.28%, or 94 points, while S&P 500 (^GSPC) futures dropped 0.25%. Contracts on the tech-heavy Nasdaq 100 (^NDX) fell 0.11%.
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