After an initial move to the upside, stocks have moved notably lower over the course of the trading day on Tuesday. The tech-heavy Nasdaq is leading the pullback after posting strong gains in the two previous sessions.
The major averages have seen further downside in recent trading, falling to new lows for the session. The Nasdaq is down 317.70 points or 1.6 percent at 19,547.28, the S&P 500 is down 47.66 points or 0.8 percent at 5,927.72 and the Dow is down 87.88 points or 0.2 percent at 42,618.68.
The sharp pullback by stocks comes amid a notable increase in treasury yields, with the yield on the benchmark ten-year note surging to its highest level in almost nine months.
The jump by treasury yields, which has led to concerns about the outlook for interest rates, came following the release of some upbeat U.S. economic data.
The Institute for Supply Management released a report showing its reading on U.S. service sector activity increased by more than expected in the month of December.
The ISM said its services PMI climbed to 54.1 in December from 52.1 in November, with a reading above 50 indicating growth. Economists had expected the index to rise to 53.3.
The report also said the prices index surged to 64.4 in December from 58.2 in November, climbing above 60 for the first time since January 2024. The sharp increase by the index has led to worries services inflation will remain sticky.
A separate report released by the Labor Department showed job openings in the U.S. unexpectedly increased in the month of November.
The weakness on Wall Street also comes amid a slump by shares of Nvidia (NVDA), with the AI darling and market leader tumbling by 5.4 percent after reaching a record intraday high.
Shares of Tesla (TSLA) have also plunged by 4.7 percent after Bank of America downgraded its rating on the electric vehicle maker’s stock to Neutral from Buy.
Sector News
Brokerage stocks have shown a significant move to the downside, dragging the NYSE Arca Broker/Dealer Index down by 1.8 percent.
Networking, software and semiconductor stocks are also seeing considerable weakness, contributing to the steep drop by the tech-heavy Nasdaq.
Notable weakness is also visible among retail stocks, while gold and oil stocks have moved to the upside amid increase by the prices of their associated commodities.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Japan’s Nikkei 225 Index surged by 2.0 percent and China’s Shanghai Composite Index advanced by 0.7 percent, although Hong Kong’s Hang Seng Index bucked the uptrend and slumped by 1.2 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.3 percent, the German DAX Index and the French CAC 40 Index are both up by 0.5 percent.
In the bond market, treasuries are extending the downward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.3 basis points at 4.689 percent.
Business News
U.S. Stocks Pull Back Sharply As Treasury Yields Jump Following Upbeat Data
2025-01-07 15:51:54
