Investing.com — The Dow fell on Tuesday, weighed down by health care stocks, and U.S. Treasury yields rose again on comments from several Federal Reserve officials who reiterated the need to keep interest rates high for an extended period of time. That poor start continued into the second quarter as it rose significantly.
By 16:00 ET (20:00 GMT), it was down 396 points (1%), down 0.7%, and down 220 points (1%).
Treasury yields continue to rise as Fed speaker signals long-term rise
U.S. Treasury yields extended their gains from the previous day as recent strong economic data and dampening hopes for early rate cuts from Fed speakers made the path to an early rate cut unclear.
San Francisco Fed President Mary Daly echoed her statement Tuesday, saying there was no urgency to cut interest rates because inflation remains above the central bank’s 2% target. Cleveland Fed President Loretta Mester echoed Cleveland Fed President Loretta Mester’s sentiments in The Daily, who said she expects the Fed to cut rates this year, but that it’s better to cut them too soon than to keep rates high for an extended period of time. He warned that there was a greater risk in changing direction.
CME’s FedWatch tool now projects a roughly 62% chance that the Fed will cut interest rates in June, down from about a 70% chance a week ago.
The remarks came after data showed that February saw an increase of 8.756 billion from January’s 8.748 billion, although it fell slightly short of expectations of 8.76 billion.
Employment statistics continue to be closely watched, and the March employment report is scheduled to be released on Friday.
Against the backdrop of expectations that the U.S. economy is headed for a “soft landing” in which inflation moderates but a serious economic downturn is avoided, employment in the U.S. economy increased by 205,000 in March, compared to 270,000 in February. The number is expected to slow down from an increase of 5,000 people.
Healthcare stocks suffer losses
Healthcare stocks, etc. Humana Co., Ltd. UnitedHealth Group Incorporated (NYSE:) and CVS Health Corporation (NYSE:) fall sharply as Centers for Medicare & Medicaid Services private Medicare Advantage rates increase by an average of 3.7% starting in 2024 and led the overall market in losses. .
Interest rates remained unchanged from their initial proposal in January, signaling that insurers’ margins will remain under pressure next year. This surprised Wall Street, as it was the only time in the past decade that the final interest rate was not raised from the initial proposal, according to research by JPMorgan.
Tesla leads EV inventory slump after disappointing first-quarter deliveries
Tesla (NASDAQ:) stock fell 5% after the electric car maker reported first-quarter deliveries that were well below expectations.
The EV giant delivered 386,810 units, compared to an estimated 449,080, according to Bloomberg Consensus.
Wedbush said in a memo that the failure was an “unmitigated disaster” and “a critical moment for Musk to turn this around or the Tesla story. It is clear that there are dark days ahead that could disrupt plans.” The term Tesla story. ”
Competitor player Rivian Automotive (NASDAQ:) Shares also fell 5% after the EV company fell behind analyst consensus in first-quarter production numbers.
Other EV stocks such as Nio Inc Class A ADR (NYSE:) and Nikola Corp (NASDAQ:) were also in the red.
PVH is sluggish due to soft guidance.Schlumberger begins trading
Schlumberger NV (NYSE:) announced that it has entered into an agreement to acquire oil field equipment manufacturer Champion
Elsewhere, PVH (NYSE:), the fashion retailer that owns the Tommy Hilfiger and Calvin Klein brands, reported disappointing full-year sales guidance due to a difficult macroeconomic background, particularly in Europe. , the stock price fell more than 22%.
(Peter Nurse contributed to this article.)
