NEW YORK (AP) — Most U.S. stocks fell Monday after a surprisingly strong report on U.S. manufacturing raised questions about how far interest rates can ease this year.
The S&P 500 fell 10.58 points (0.2%) from its all-time high to end at 5,243.77. The Dow Jones Industrial Average fell 240.52 points, or 0.6%, from its all-time high to $39,566.85. The Nasdaq Composite was an outlier, rising 17.37, or 0.1%, to 16,396.83.
FedEx fell 3.3% after the company announced it would not extend its delivery contract with the U.S. Postal Service. domestic air cargo, ends September 29th. Donald Trump’s social media company, trump media and Technology Group lost more than a fifth of its value in another frenzy of trading. The company, whose main business is the Truth Social platform, said it lost $58.2 million last year on revenue of just $4.1 million. The company’s stock price fell 21.5%.
Universal Health Services fell 4%, one of the biggest losses in the S&P 500 index. An Illinois jury has awarded $535 million in damages to a patient who claimed negligence in a sexual assault case involving another patient. The company said it has insurance to cover some of the amount, but said the final resolution of the case could ultimately have a material impact on its finances.
Newmont was instrumental in limiting the number of goals conceded. The company’s stock rose 1.6% as gold prices continued to set records.
In the bond market, U.S. Treasury yields soared after reports that U.S. manufacturing unexpectedly returned to growth last month. According to the Supply Management Association, the economic slump that lasted 16 months has ended.
This is the latest evidence that the U.S. economy remains strong despite high interest rates. This is good for the stock market because it can help companies increase their profits. However, there is a possibility that upward pressure on inflation will continue. That could mean further hesitation from the Federal Reserve in cutting interest rates, which investors desperately need.
The manufacturing data caused Wall Street traders to temporarily scale back bets on a first rate cut, expected as early as June. Deutsche Bank economists said this remains a “reasonable baseline” expectation, but recent tough comments from Fed officials could suggest that interest rates will remain higher for longer than previously thought. It is said that there is.
The Fed raised its key policy rate to its highest level since 2001 in an effort to slow the economy and hit investment prices enough to curb inflation. Expectations for future interest rate cuts are the main reason the S&P 500 index soared more than 20% from October to March.
Several economic reports are expected to be released this week that could sway the Fed’s thinking, including updates on job openings across the country and the strength of the U.S. service sector. The headliner will be released on Friday, when economists expect a report to show that employment cooled slightly last month.
The slowdown will be welcomed on Wall Street. The economy is expected to remain strong, but not strong enough to push up inflation. Inflation has moderated since its peak about two years ago.but progress Became bumpy together recently report It’s coming again this year It’s hotter than expected.
Jerome Powell Fed Chairman I said it again on Friday. The central bank said it was waiting for “better inflation indicators” before cutting rates this year. The Bank maintains its outlook for three rate cuts in 2024.
According to a report on Friday, Inflation is progressing as expected, at least by the measure the Federal Reserve prefers to use. Both the U.S. bond market and stock market were closed on that day.
Wall Street traders had initially expected more interest rate cuts, but now see three cuts this year as the most likely option, after morning manufacturing data that came in better than expected. As a result, some views have shifted to the possibility that the extent of interest rate cuts will be reduced.
In the bond market, the yield on the 10-year U.S. Treasury rose to 4.31% from 4.21% late Thursday. The two-year bond yield, which more accurately reflects expectations for the Fed, rose to 4.71% from 4.63%.
In overseas stock markets, Tokyo’s Nikkei Stock Average fell 1.4% after a sharp decline. Bank of Japan Quarterly Survey Looking at business conditions, business confidence in major manufacturers has fallen for the first time in a year.
In China, stocks on the Shanghai market rose 1.2%. manufacturing industry It is being strengthened.
Stock markets in Europe were closed for the holiday.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
