Advertisment
Stocks tumbled on Tuesday to close out a losing month of April after higher-than-expected wage data raised fresh inflation concerns ahead of the Federal Reserve’s rate decision on Wednesday.
The Dow Jones Industrials stumbled 570.24 points, or 1.5%, to finish off Tuesday at 37,815.85, bringing its losses for the month to 4.3%.
The S&P let go of 80.52 points, or 1.6%, to 5,035.65, set to snap a five-month winning streak with a 3% loss for April.
The NASDAQ jettisoned 325.26 points, or 2%, to 15,657.82, to cap a 3% decline for the month.
Despite the April setback, the S&P 500 is still up more than 25% from its low last October as investors bet the economy could withstand higher rates and piled into AI plays like Nvidia. Data in the past month raised questions about whether stubborn inflation was weakening the economy while keeping the Fed in a restrictive mode. McDonald’s in its quarterly report Tuesday warned about a more selective consumer due to higher prices.
The busiest week of corporate earnings is set to continue with Amazon reporting its quarterly results on Tuesday, and Apple on Thursday.
The April jobs report is also expected at the end of this week, preceded Wednesday by releases on job openings and private sector employment growth.
In early earnings news, McDonald’s missed quarterly earnings estimates as same-store sales fell short of expectations. Higher prices have scared away some low-income customers.
There’s plenty of economic news on the docket this week, with Fed policymakers convening for their two-day policy meeting on Tuesday. The central bank is broadly anticipated to keep interest rates steady, but traders worry Fed Chair Jerome Powell’s post-meeting comments will lean more hawkish after the recent spate of hotter inflation reports.
The employment cost index, a measure of wages and benefits, added 1.2% in the March quarter, above the 1% consensus estimate from economists polled by Dow Jones. Treasury yields jumped following the data.
Markets are pricing in just one quarter percentage point cut in 2024, as persistent inflation and a resilient economy raise the likelihood the Fed will stay higher for longer.
Prices for the 10-year Treasury sagged, lifting yields to 4.66% from Monday’s 4.62%. Treasury prices and yields move in opposite directions.
Oil prices fell 55 cents to $82.08 U.S. a barrel.
Gold prices tumbled $50.90 to $2,306.80.
