Stocks lost ground on Tuesday as more earnings points and economic data came in and investors awaited the outcome of the Federal Reserve’s policy meeting.
The S&P 500 (^GSPC) was down 0.4% in the daily session, while the Dow Jones Industrial Average (^DJI) was down 0.2%. The big tech Nasdaq Composite (^IXIC) fell 0.9%. All three indices had risen at the beginning of the session before falling.
Investors digested economic releases on Tuesday, including the Job Vacancies and Job Turnover Survey (JOLTS), which found job vacancies unexpectedly rose in September to 10.7 million from 10.28 million last month. Economists had expected job openings to shrink to around 10 million, which would have been in line with the kind of cooling the Federal Reserve wants to see in the job market.
Meanwhile, the ISM manufacturing PMI for October fell to 50.2, while economists surveyed by Bloomberg estimated 50.0. The ISM manufacturing employment index rose to 50.0 from 48.7, while economists surveyed by Bloomberg estimated 53.0.
The stock moves came after major indexes trailed on Monday as investors braced for the Federal Reserve’s interest rate decision on Wednesday.
“Although stocks are down from their lows since mid-October, the rally has not been enough to get the S&P 500 back to the levels of the last Fed meeting,” Jake Gordon, an analyst at Bespoke Investment Group, wrote in a blog post. release. Note.
“The S&P 500 is once again down between meetings, making it the eighth time in the last ten that it has traded down between meetings. That said, the current decline has been much more modest than some of the historic drops like 13% decline before the June meeting,” Gordon added.
The Fed’s aggressive pace of interest rate hikes has pressured markets for much of the year, leaving investors waiting for any sign that the central bank is abandoning its hawkish stance.
The Fed is widely expected to raise interest rates by 75 basis points on Wednesday at the end of its two-day policy meeting, but some strategists see the bank reducing rate hikes going forward.
JPMorgan economist Michael Feroli sees “a step down from 75bps to 50bps to 25bps before this tightening cycle is over.” [the] terminal rate is lower or that the tightening cycle ends in 2022 is likely to [be] bullishly digested by stocks. The biggest risk to this outlook is that the CPI is higher than expected next week or in December.”
Whatever the size of December’s move, “the Fed is in a tough position because it’s so data-driven. And it’s not clear how fast inflation is going to come down,” the head of the Public Markets Group, Lisa Erickson, told Yahoo Finance Live on Monday.
On earnings and the company front on Tuesday:
Uber (Uber): The ride-sharing giant posted a loss in the third quarter but beat analysts’ revenue estimates and showed an increase in bookings. The shares rose more than 14% in early trading.
Pfizer (PFE): The drugmaker posted a better-than-expected quarter and raised its revenue outlook for the year even as higher prices offset slowing demand for COVID-19 vaccines outside the US.
sofi (SOFI): The digital bank reported lower-than-expected quarterly losses and revenues that beat analyst estimates. The fintech company raised its guidance as the company added 4.7 million more customers by the end of the third quarter.
Eli Lilly and Company (LLY): The pharmaceutical company beat expectations for the third quarter but cut its outlook for 2022, citing exchange rates and tax laws.
abiomed (ABMD): The small heart pump maker has agreed to a nearly $17 billion acquisition by Johnson & Johnson (JNJ) as the deal gives J&J exposure to a high-growth medical technology segment.
Advanced Micro Devices (AMD), Airbnb (ABNB), Mondelez (MDLZ) and Clorox (CLX) are also scheduled to report on Tuesday.
And the week will end with the October employment report. The Labor Department report is expected to show monthly payrolls falling below 200,000, while economists surveyed by Bloomberg estimated that 190,000 jobs were added or created last month.
In energy markets, Brent crude, the international benchmark for oil prices, fell to $94.36 a barrel on Tuesday morning. Yields on the 10-year Treasury note fell as much as 12 basis points to below 4% before rising back above that level later in the morning.
US-listed shares of Chinese companies including Alibaba (BABA) also rose on Tuesday on unconfirmed reports on social media that the Chinese government may be moving toward unwinding its strict COVID policy.
Separately, the Toronto Stock Exchange resumed trading after a technical issue halted trading shortly after the opening bell on Tuesday.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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