The S&P 500 closed slightly lower on Tuesday as long-dated Treasury yields pushed to multi-decade highs ahead of this week's inflation and jobs data. Stocks pared their losses after Federal Reserve Bank of New York President John Williams signaled patience on rate hikes, while a separate report showed US consumer confidence at its weakest in nearly twelve and a half years.
The S&P 500 lost 12.85 points, or 0.17%, to close at 7,670.84 on Tuesday, as government bond yields extended their climb ahead of inflation and labor-market data due later in the week. The Dow Jones Industrial Average fell 131.59 points, or 0.26%, to 51,349.92, and the Nasdaq Composite lost 22.84 points, or 0.08%, to 26,797.54.
Long-dated yields hit multi-decade highs
The 30-year Treasury bond yield hit 5.6206%, its highest level since June 2002, while the benchmark 10-year Treasury yield climbed to 5.293%, its highest since June 2007. Higher yields raise the cost of capital and can make bonds an appealing alternative to equities, while also potentially denting corporate earnings power.
Stocks pared their declines, however, as yields eased from earlier session highs and oil prices retreated on signs of a recovery in Middle East exports. New York Fed President John Williams said the central bank has time to weigh incoming data before deciding on another interest rate move. Following his comments, the odds of at least a 25-basis-point rate hike in October fell to 51.5%, down from nearly 70% earlier in the session, according to CME FedWatch.
Consumer confidence at a 12-1/2-year low
The Labor Department's JOLTS report showed job openings dropped by 256,000 to 7.079 million in August, below the 7.225 million estimate from economists polled by Reuters. Separately, the Conference Board said US consumer confidence plunged to a nearly 12-1/2-year low in September, with households expecting business and labor conditions to worsen over the next six months amid the Iran war and rising rates.
According to Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder: "PCE tomorrow is going to be big, so we'll see where that takes us." Fed Governor Michael Barr said more rate hikes are likely needed, while Williams struck a more patient tone on the path ahead.
Movers: Anthropic's IPO valuation, Meta, Fair Isaac
Anthropic's initial public offering prospectus showed the AI lab targeting a valuation above $2 trillion, even as it posted wider losses. Meta shares advanced 3.3% after OpenAI unveiled always-on agents called dots that chase user goals across apps on their own. Used-car retailer CarMax climbed 4.7% after reporting increased second-quarter profit and revenue, while credit scorer Fair Isaac Corp plunged 26.5% after the Federal Housing Finance Agency said Fannie Mae and Freddie Mac will move to a single pricing grid.
Declining issues outnumbered advancers by a 1.66-to-1 ratio on the NYSE and a 1.47-to-1 ratio on the Nasdaq, with trading volume of 16.15 billion shares against the 16.87 billion average of the past 20 sessions.
Source: Investing.com/Reuters
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