U.S. stocks were set for possible losses on Tuesday, signaling another weak day as health insurers fell and investors faced the possibility of a slower-than-expected interest rate cut.
Futures for the Dow Jones Industrial Average (^DJI) fell 0.4%, or 160 points, as the blue-chip index retreated from a bid to reach the key 40,000 level. S&P 500 (^GSPC) futures fell 0.3%, and tech-heavy Nasdaq 100 (^NDX) contracts fell 0.4%.
US Treasuries continue to struggle, with the benchmark 10-year Treasury yield (^TNX) rising to around 4.36%, hovering around its highest level in 2024.
After setting a series of records in the first few months of 2024, stocks are off to a lackluster start to the second quarter. The better-than-expected manufacturing data comes as the U.S. economy shows surprising resilience, weighing on growing doubts that the Federal Reserve will cut interest rates in the first half of the year.
An update to the jobs report later Tuesday will be considered in the countdown to Friday’s jobs report, which will be a key input in the Fed’s decision-making. Markets also looked to Fed officials including Michelle Bowman, Loretta Mester and Mary Daly for clues on whether inflation issues could derail three planned rate cuts. They will also listen to the explanation.
A drop in health insurance stocks early Tuesday weighed on the market after U.S. regulators surprised the industry by not increasing payments for private Medicare plans as usual. Humana (HUM) stock fell about 9% and CVS (CVS) stock fell about 6%.
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