Stocks on Wall Street experienced a retreat on Monday, marked by skepticism surrounding the likelihood of a U.S. interest-rate cut, with investors eyeing the impending release of the key monthly jobs report. The S&P 500 (^GSPC) witnessed a 0.8% decline, while the Dow Jones Industrial Average (^DJI) recorded a 0.4% drop, equivalent to approximately 150 points. The tech-centric Nasdaq Composite (^IXIC) also faced a notable downturn, falling by 1%.
This shift in the market comes after a series of five consecutive weekly wins, during which stocks surged amid the prevailing belief that the Federal Reserve would initiate rate cuts early next year. Consequently, these expectations contributed to a decline in Treasury yields, a trend that persisted despite Federal Reserve Chair Jerome Powell’s recent efforts to quell speculation about the cessation of rate hikes.
Analysts are now sounding alarms, suggesting that both stocks and bonds have experienced an exaggerated surge and are due for a correction. The 10-year Treasury yield (^TNX) saw a 5 basis points increase, reaching around 4.25%.
The forthcoming November jobs report, scheduled for release on Friday, holds the potential to further dampen market sentiment, contingent on whether the data contradicts the prevailing belief that the Fed has concluded its rate hikes. The condition of the labor market remains a critical factor in shaping policymakers’ decisions.
In other market developments, the hopes surrounding a Federal Reserve pivot positively impacted Bitcoin (BTC-USD) prices, pushing them beyond the $41,000 threshold—levels last observed prior to the crypto rout in 2022. This optimism also extended to other digital currencies, driven by expectations that the U.S. Securities and Exchange Commission (SEC) will approve U.S. spot Bitcoin ETFs in January.
Shifting focus to individual stocks, Hawaiian (HA) shares experienced an astronomical surge of approximately 190% following Alaska Air’s (ALK) announcement of its intention to acquire the beleaguered fellow airline at nearly four times Friday’s closing price. Conversely, Alaska Air’s shares faced a downturn, falling by about 12%.
In conclusion, the retreat in stocks underscores the prevailing uncertainty surrounding the prospect of an interest-rate cut, leaving investors on edge as they await further economic cues. Investors are on high alert for cues from the upcoming jobs report, which could play a decisive role in shaping market trends in the days to come.
Source: Yahoo Finance
