US stocks ended the second trading day of the week in negative territory, as uncertainty surrounding the timing of a potential interest rate cut weighed on investor sentiment. Despite closing off session lows, major indices saw broad-based declines.
The Dow Jones Industrial Average (^DJI) retreated by nearly 1%, shedding almost 400 points, retreating from its recent attempt to breach the psychologically significant 40,000 level. Similarly, the S&P 500 (^GSPC) slipped by approximately 0.7%, while the Nasdaq Composite (^IXIC) experienced a comparable downturn of nearly 1%.
In the bond market, US Treasury yields remained under pressure, with the yield on the 10-year Treasury (^TNX) hovering around 4.36%, marking its highest level thus far in 2024. Concurrently, crude oil prices surged, with crude futures (CL=F) climbing above $85 per barrel.
The lackluster performance of stocks in the second quarter follows a robust showing in the initial months of the year, during which indices notched multiple record highs. However, concerns have emerged regarding the likelihood of an interest rate cut by the Federal Reserve amid stronger-than-anticipated manufacturing data, coupled with elevated inflationary pressures.
Economic data from the Bureau of Labor Statistics revealed a marginal increase in job openings for February, accompanied by a slight uptick in hiring activity, offering a mixed picture of the labor market’s health.
Health insurer stocks faced selling pressure after US regulators opted against raising payments for private Medicare plans as anticipated. Shares of Humana (HUM) tumbled by approximately 14%, while CVS (CVS) also registered a decline of roughly 7%.
In individual stock movements, Tesla (TSLA) encountered a setback, with its shares declining by approximately 5% subsequent to the company reporting lower-than-expected vehicle deliveries for the first quarter.
Amidst ongoing uncertainty surrounding the timing of a potential interest rate cut and evolving economic indicators, the trajectory of US stocks remains closely intertwined with market sentiment and monetary policy expectations.
