Today’s stock market witnessed a downturn on Wall Street, heading towards an unusual consecutive loss following a significant rally that propelled it to a 20-month high but subsequently lost momentum. In early trading, the S&P 500 marked a 0.4% decrease, setting the stage for its first back-to-back decline since October. The Dow Jones Industrial Average dipped by 0.4%, shedding 131 points as of 9:40 a.m. Eastern time, and the Nasdaq composite experienced a 0.3% decline.
Concerns about China’s economic health, the world’s second-largest economy, led to steeper stock declines in Asia. On Wall Street, KeyCorp (NYSE:KEY) faced a notable 2.5% drop after revising down its forecast for income from fees and other non-interest sources.
This December slowdown follows a robust November rally, fueled by optimism that the Federal Reserve might conclude its impactful interest rate hikes. With inflation showing a decline since its peak two summers ago, there is hope that the Fed can transition to cutting interest rates, potentially averting a recession and boosting prices across various investments.
Later in the morning, crucial data is expected to influence the Fed’s decision on interest rates. Reports on job openings and the strength of U.S. services industries will be released. Investors are particularly eager to observe a slowdown in job openings, hoping that the market can cool down through reduced open positions rather than extensive layoffs. Economists anticipate a report revealing that employers advertised 9.3 million openings at the end of October, down from 9.6 million the previous month.
In the bond market, Treasury yields continued to retreat from the late October highs. The 10-year Treasury yield dropped to 4.20% from 4.26% on Monday, offering some relief to stocks and other markets. The yield, which had surpassed 5% in October, the highest in over a decade, has contributed to the recent surge in cryptocurrency prices. The excitement over a potential bitcoin exchange-traded fund, opening up new investor avenues, has driven the price above $42,000. Robinhood Markets reported a significant uptick in crypto trading volumes during November and a $1.4 billion increase in net deposits, resulting in a 4.3% rise in its stock.
However, Take-Two Interactive (NASDAQ:TTWO) faced a 0.6% decline after revealing a later-than-expected release date for its highly anticipated Grand Theft Auto VI video game in 2025.
Internationally, stocks plummeted by 1.9% in Hong Kong and 1.7% in Shanghai following a warning from Moody’s credit-rating agency about a potential downgrade to China’s rating. China’s economic growth is slowing, and its real estate sector is grappling with mounting challenges. Stocks in Japan and South Korea also experienced declines, while markets across Europe exhibited mixed trends.
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