S&P 500, Dow, Nasdaq fall as traders pare rate cut bets after new economic data

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US stocks reversed early gains as cautious investors weighed fresh economic data amid Nvidia (NVDA:) big plans for artificial intelligence.

The benchmark S&P 500 (^GSPC) fell about 0.6%, while the tech-heavy Nasdaq Composite (^ IXIC) lost approximately 1.4%.The Dow Jones Industrial Average (^ DJI) jumped during the afternoon session but fell about 0.1% in the afternoon.

Meanwhile, the 10-year Treasury yield (^ TNX) added roughly 6 basis points to hover just below 4.7%.And bets on when the Federal Reserve will cut rates next also pushed back.

The Supply Management Institute early Tuesday morning manufacturing PMI It said the manufacturing sector continued to expand last month, although the index of prices paid jumped to a near two-year high of 64.4 from 58.2 previously.

The rate hike “worries the Fed because it is in line with PCE super-core inflation remaining at 3.5% through the middle of next year,” wrote Capital Economics North America economist Thomas Ryan.

“This is a good reminder that the Fed’s fight against inflation is far from over, especially in a year when tariffs and immigration restrictions will resume pressure on prices.”

Also, JOLTS jobs increased in price more than expected during the month of November. Fewer hires were also made compared to the previous month, while the unemployment rate, a sign of confidence among workers, fell to 1.9% from 2.1% in October.

Data sets the stage Friday’s all-important jobs report. Fed officials in recent days signaled that they would take a more gradual approach reductions given the stability of the labor market and stable inflation.

Investors are now almost certainly betting that the central bank will keep interest rates unchanged later this month. according to the CME FedWatch tool.

In corporates, Nvidia shares reversed gains, falling about 5% after closing at a record high CEO Jensen Huang’s CES Keynote revealed on Monday a new AI superchip among other planned products.

Despite Nvidia’s decline, other chip stocks extended their rally, led by Micron Technology (IN:) by about 4% and Asian names are making gains.

At the same time, the clock is connected to make it simpler to get around Donald Trump’s Tariff Agenda. The president-elect denied it on Monday Washington Post report that is his team considering more targeted measures — which would be more promising for global growth.

DIRECTLY 8 updates

Moderna, other vaccine makers surge after US bird flu deaths

Stocks of vaccine makers rose next Tuesday First bird flu death in the US as well as Increase in cases of COVID-19according to CDC data.

Modern (mRNA:) increased by about 12%. Moderna was in July 2024 was awarded 176 million dollars by the US government to develop its mRNA H5N1 (bird flu) vaccine, which is in early testing.

Pfizer (PFE:) is also developing an mRNA vaccine for H5N1. The company’s shares were up a more modest 1.4% on Tuesday. Its COVID-19 vaccine partner, BioNTech (BNTX:), increased by more than 5%.

Meanwhile, German biotech company CureVac (CVAC:) increased by 5.9%. CureVac is developing an mRNA avian flu vaccine in partnership with Indian pharmaceutical giant GlaxoSmithKline (GLAXO.BO:), which rose just over 1%.

Also amid the rise of COVID-19, vaccine maker Novavax (NVAX:) increased by more than 10%.
Dollar gains as investors reevaluate interest rate cuts

USD (DX=F, DX-Y.NYB) rose on Tuesday, rebounding after the currency hit a one-week low to subsequent reports President-elect Donald Trump will not undertake an aggressive tariff plan.

“The dollar rallied today after ISM services (54.1) and job creation (8.1 million) came in sharply above expectations in December, leading markets to scale back their expectations of a Federal Reserve easing this year to just 33 basis points,” Kyle said. : Ballinger Group’s FX markets analyst wrote in a letter:

“The exchange rate of the dollar is driven up by two main points. The first is a recovery in labor demand, reflected by strong job opening growth, and the second is the strongest ISM price index since February 2023,” he said.

Prices paid in the services sector hit a nearly two-year high, suggesting the fight against inflation is far from over.Traders cut interest rate cut bets after the data, with less than a 50% chance the central bank will cut rates at its June meeting. before the meeting. according to the CME FedWatch tool.

“It’s certainly too early to call inflation re-acceleration from this round of data, and markets will take more cues from non-farm payrolls on Friday,” Chapman said. rising to an overly stretched hawkish reassessment of the Fed’s path.
Trump announces $20 billion in foreign investment to build new data centers

President-elect Donald Trump announced new multibillion-dollar foreign investment to build new data centers in the United States as research and interest in artificial intelligence picks up.

On Tuesday, Trump revealed that Damac Group, based in Dubai and backed by billionaire developer Hussain Sajwani, would invest $20 billion in construction.

“They feel so strongly about the country that they want to let people know about it,” the president-elect said during a press briefing at Mar-a-Lago. “It’s an honor to have such a great investor.”

Trump said the investment would be used to build “massive new data centers” in the Midwest and Sangelt regions “and keep America on the leading edge of technology and artificial intelligence.”

The first phase of the program will begin in several states, including Texas, Arizona, Oklahoma, Michigan, and Indiana, among others.
The latest service data show that the fight against inflation is “not over”.

Prices paid in the services sector rose in December, raising concerns on the path of progress of inflation.

Data from Institute of Supply Management showed that the price paid index rose to 64.4 in December from 58.2 in the previous month.In general, activity in the sector also increased, with the ISM services index rising to 54.1 in November from 53.5. from

“The rise in the price index to a near two-year high of 64.4 from 58.2 is a concern for the Fed as it is consistent with PCE core inflation remaining at 3.5% through the middle of next year,” Capital Economics North America economist Thomas Ryan said in a note to clients on Tuesday wrote in the post. “This is a good reminder that the Fed’s fight against inflation is far from over, especially in a year when tariffs and immigration restrictions will resume price pressure.”

The 10-year Treasury yield (^ TNX) quickly moved higher after the release, adding about 7 basis points to hover just below 4.7%.And bets on when the Federal Reserve will next cut rates also backed off.

Traders now see a less than 50% chance the Fed will cut rates ahead of the central bank’s June meeting. according to the CME FedWatch tool. Yesterday, traders saw a roughly 55% chance that the Fed would cut rates by at least 25 basis points by the end of the May meeting.

Markets sold off as rates rose on the Nasdaq Composite (^ IXIC), which opened the day in the green, fell about 1%, while the S&P 500 (^GSPC), which was also positive at the beginning of the session, decreased by about 0.4%.
Jobs increased more than expected in November

November job openings rose more than expected as investors continue to analyze the pace of the labor market slowdown amid questions about how much the Federal Reserve will cut interest rates this year.

New data from the Bureau of Labor Statistics released on Tuesday showed that 8.1 million jobs were added at the end of November, up from 7.84 million in October.

The October figure was revised higher from the 7.74 million job openings initially reported.Economists polled by Bloomberg had expected Tuesday’s report to show 7.74 million openings in November.

The Job Openings and Labor Turnover Survey (JOLTS) also showed that 5.27 million were hired in the month, down from 5.39 million in October.The hiring rate fell to 3.3% from 3.4% in October. : Also in Tuesday’s report, the layoff rate, a measure of worker confidence, fell to 1.9% from October’s 2.1% million decreased to 3.07 million.
Stocks open higher

US stocks rose on Tuesday with Nvidia (NVDA:) one more time increasing market sentiment.

The benchmark S&P 500 (^GSPC) increased by 0.3%, keeping process fuels close achievements of the previous session. Dow Jones Industrial Average (^ DJI) also rose 0.3%, while the tech-heavy Nasdaq Composite (^ IXIC) increased by around 0.2%.
Nvidia rallies after CEO unveils AI superchip, robotics technology at CES

Nvidia (NVDA:) shares rose as much as 2.5% in premarket trading late Monday after a keynote speech by Jensen Huang, CEO of the tech industry’s CES trade show in Las Vegas.

Huang gave a presentation a flurry of updates on upcoming Nvidia products that preview what’s next in the emerging artificial intelligence market and other emerging technologies.

Shares of Nvidia closed at a record high of $149.43 Monday, before Huang’s keynote address, closing at $148.88, the previous record set on Nov. 7.

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