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Wall Street closes lower as Treasury yields jump

Wall Street

The S&P 500 and the Nasdaq are around 4% lower from record high levels hit last month

Wall Street stocks closed lower in choppy trading on Tuesday as Treasury yields jumped, with investors weighing the likely path of interest rates in a resilient U.S. economy with sticky inflation.

Fed Chair Jerome Powell said on Tuesday recent inflation data has not given policymakers enough confidence to ease credit soon, noting that the U.S. central bank may need to keep rates higher for longer than previously thought.

The DJIA got a boost from UnitedHealth Group’s better-than-expected quarterly results. Real estate and utilities were the biggest drags on the S&P 500, while technology gave the biggest boost.

People are trying to balance this two-sided narrative: U.S. economic growth, which looks really good, and at the same time the inflation picture and interest rates, which will eventually be problematic for the equity market, according to James St. Aubin, chief investment officer at Sierra Mutual Funds in California.

A report on Monday showed retail sales rose more than expected in March, a sign of U.S. economic resilience that helped push benchmark U.S. 10-year Treasury yields to five-month peaks on Tuesday.

The DJIA gained 63.86 points, or 0.17%, to 37,798.97, the S&P 500 shed 10.41 points, or 0.21%, to 5,051.41 and the Nasdaq Composite shed 19.77 points, or 0.12%, to 15,865.25.

The S&P 500 and the Nasdaq are around 4% lower from record high levels hit last month.

Declining issues outnumbered advancers by a 2.25-to-1 ratio on the NYSE, which had 23 new highs and 175 new lows. On the Nasdaq, 1,451 stocks advanced and 2,764 dropped as declining issues outnumbered advancers by a 1.9-to-1 ratio.

The S&P 500 posted one new 52-week high and eight new lows while the Nasdaq logged 30 new highs and 362 new lows.

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