U.S. Stocks Move Mostly Lower Amid Lingering Interest Rate Anxiety

With traders returning to their desks following the long Presidents’ Day weekend, stocks have moved mostly lower during trading on Tuesday. The tech-heavy Nasdaq has shown a significant move to the downside on the day.

Currently, the Nasdaq is off its worst levels but still down 182.28 points or 1.2 percent at 15,593.37. The S&P 500 is also down 26.75 points or 0.5 percent at 4,978.82, while the narrower Dow has bucked the downtrend and inched up 21.26 points or 0.1 percent to 38,649.25.

The weakness on Wall Street partly reflects ongoing anxiety about the outlook for interest rates following last week’s hotter-than-expectation inflation data.

CME Group’s FedWatch Tool is indicating just an 8.5 percent chance the Federal Reserve will lower rates by a quarter point in March, while the chances of a quarter point rate cut in early May have fallen to 32.9 percent.

The Fed may provide additional insight into the outlook for interest rates with the release of the minutes of its latest monetary policy meeting on Wednesday.

“The minutes of the Federal Reserve’s January Federal Open Market Committee meeting may clarify how much more ‘good data’ the Fed’s policymakers want to see before starting to reduce interest rates,” said Bill Adams, Chief Economist for Comerica Bank.

He added, “Chair Powell said at the press conference following the January decision that he saw a March cut as unlikely, but was uncharacteristically vague about exactly what the Fed’s preconditions for cuts are; this suggests FOMC members still disagree about the issue.”

Meanwhile, the uptick by the Dow comes as shares of Walmart (WMT) are surging by 3.9 percent after the retail giant reported fourth quarter results that exceeded estimates and announced a deal to acquire TV maker Vizio (VZIO) for $2.3 billion.

Sector News

Semiconductor stocks are seeing substantial weakness on the day, resulting in a 2.3 percent tumble by the Philadelphia Semiconductor Index.

Considerable weakness is also visible among computer hardware stocks, as reflected by the 2.2 percent slump by the NYSE Arca Computer Hardware Index.

Steel, software and transportation stocks have also shown notable moves to the downside, while utilities stocks are seeing some strength on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.3 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.2 percent.

In the bond market, treasuries have moved back to the upside after coming under pressure last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.9 basis points at 4.246 percent.

Business News