US stocks eased on Tuesday as Treasury yields pushed to multi-decade highs and Federal Reserve officials sent mixed signals on further rate hikes. The Dow, S&P 500 and Nasdaq all closed lower, while a slump in consumer confidence and weaker job openings data added to the caution ahead of Wednesday's inflation report.
US stocks ended lower on Tuesday as government bond yields continued their ascent ahead of inflation and labor market data. The Dow Jones Industrial Average fell 131.59 points, or 0.26%, to 51,349.92. The S&P 500 lost 12.85 points, or 0.17%, to 7,670.84, and the Nasdaq Composite dropped 22.84 points, or 0.08%, to 26,797.54.
Treasury Yields Hit Multi-Decade Highs
The 30-year Treasury bond yield climbed to 5.6206%, its highest level since June 2002. The 10-year Treasury yield rose to 5.293%, its highest since June 2007. Yields have been climbing in part because of higher oil prices tied to the seven-month-old war in the Middle East and worries about inflation. But crude eased on Tuesday as US crude oil fell 2.27% to $90.52 a barrel on signs of recovering exports from the Middle East.
Fed Officials Split on the Rate-Hike Path
Odds of another rate hike at the Fed's October meeting eased to 51.5%, down from nearly 70% earlier in the session, after New York Fed President John Williams said the central bank has time to weigh incoming data before its next move. Not every policymaker agreed. Fed Governor Michael Barr said more rate increases are likely needed, and Chicago Fed President Austan Goolsbee said letting inflation stay above target for 5-1/2 years is "playing with fire."
Consumer Confidence Slumps Ahead of Inflation Data
US consumer confidence plunged to its lowest level in nearly 12-1/2 years in September, with households expecting business conditions and the labor market to weaken over the next six months. Job openings, a measure of labor demand, dropped by 256,000 to 7.079 million in August, below the 7.225 million estimate from economists polled by Reuters. Investors are now awaiting Wednesday's Personal Consumption Expenditures price index for further clues on the inflation outlook.
Tech Shares Buck the Broader Slide
Technology stocks outperformed the wider market as investors welcomed Anthropic's IPO prospectus, which showed the AI lab has grown sharply in the last year while targeting a valuation of more than $2 trillion. Meta shares advanced 3.3% after OpenAI unveiled new AI agents seen as a rival to Meta's recently launched Muse platform.
Sources: Investing.com, Investing.com
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