U.S. stocks are pulling back on Wednesday and trimming their gains for May, which had been on track to be Wall Street’s best month in six. The S&P 500 was 0.8% lower in early trading and sinking further from its record set last week. The Dow Jones Industrial Average was down 427 points or 1.1%, and the Nasdaq composite was 0.7% lower after setting its latest all-time high.
Quick Read
- Wall Street wilts to trim its big gain for May
- Market Decline: U.S. stocks are pulling back on Wednesday, trimming their gains for May, which had been Wall Street’s best month in six.
- Indices Performance: The S&P 500 was down 0.8%, the Dow Jones Industrial Average fell 427 points or 1.1%, and the Nasdaq composite dropped 0.7%.
- Airline Stocks Slump: American Airlines Group led the slump for airline stocks, losing 13% after cutting its profit forecast and announcing the departure of its chief commercial officer.
- Energy Sector Moves: ConocoPhillips fell 2.8% after announcing it would buy Marathon Oil in an all-stock deal valued at $22.5 billion. Marathon Oil rose 9.2%.
- Retail Sector Performance: Advance Auto Parts sank 12.3% after missing analysts’ expectations for the latest quarter. Dick’s Sporting Goods jumped 12.1% after beating profit and revenue expectations and raising its full-year profit forecast. Chewy surged 20.2% after reporting stronger-than-expected profit and announcing a $500 million stock buyback.
- Treasury Yields Impact: Longer-term Treasury yields ticked higher, with the 10-year yield rising to 4.58% from 4.54%, contributing to the broader market’s decline.
- AI Stock Movement: Nvidia’s stock fell 1.4%, offsetting some gains from its recent blowout profit report.
- International Markets: Asian and European indexes were mostly lower, with Hong Kong’s Hang Seng down 1.8%, South Korea’s Kospi down 1.7%, and France’s CAC 40 down 1.5%. Shanghai stocks were roughly flat despite the IMF raising China’s growth forecast to 5%.
The Associated Press has the story:
Wall Street slides as rate worries push bond yields higher
Newslooks- NEW YORK (AP) —
U.S. stocks are pulling back on Wednesday and trimming their gains for May, which had been on track to be Wall Street’s best month in six.
The S&P 500 was 0.8% lower in early trading and sinking further from its record set last week. The Dow Jones Industrial Average was down 427 points or 1.1%, and the Nasdaq composite was 0.7% lower after setting its latest all-time high.
American Airlines Group led a slump for airline stocks after it cut its forecast for profit and other financial targets for the spring. It said fuel costs may be a bit lower than previously thought, but an important revenue trend would likely be as well. It also said its chief commercial officer, Vasu Raja, is leaving the company. It lost 13%.
ConocoPhillips fell 2.8% after it said it would buy Marathon Oil in an all-stock deal valuing the company at $22.5 billion, including $5.4 billion of net debt. It’s the latest big deal for an industry that’s seen several buyout announcements recently. Marathon Oil rose 9.2%.
Advance Auto Parts sank 12.3% after its results and revenue for the latest quarter came up just shy of analysts’ expectations. The retailer said the industry has had a slower start to the year than expected.
Another tick higher in longer-term Treasury yields was also weighing on the stock market broadly, and the 10-year yield rose to 4.58% from 4.54% late Tuesday. It’s still down for the month, but it’s been creeping higher since dropping below 4.40% in the middle of May.
The swings have come as traders recalibrate their expectations for when the Federal Reserve could begin cutting its main interest rate, which is at its highest level in more than two decades.
Wall Street always yearns for cuts to rates because they can boost prices for investments and remove downward pressure on the economy. But traders have had to delay their too-optimistic forecasts for rate cuts several times because inflation has proven stubborn to subdue fully.
The Fed is trying to pull off the balancing act of grinding down on the economy just enough through high interest rates to get inflation fully under control, but not so much that it leads to widespread layoffs.
The U.S. stock market has been continuing to set records despite worries about interest rates staying high in part because stocks related to artificial-intelligence technology keep rising. Nvidia’s latest blowout profit report helped drive the frenzy even higher, but momentum can’t last forever. Its stock is down 1.4% and on track for its first dip since its profit report a week ago.
It helped offset a 12.1% jump for Dick’s Sporting Goods, which topped analysts’ expectations for profit and revenue in the latest quarter. The retailer also raised its forecast for profit over the full year.
Chewy, an online seller of pet supplies, likewise reported stronger profit for the latest quarter than expected, and its stock jumped 20.2%. It also said it will return up to $500 million to its shareholders by buying back its own stock.
In stock markets abroad, indexes were mostly lower across Asia and Europe. Hong Kong’s Hang Seng fell 1.8%, South Korea’s Kospi dropped 1.7% and France’s CAC 40 fell 1.5%.
Stocks in Shanghai were roughly flat after the International Monetary Fund raised its forecast for China’s economic outlook, saying it expects the No. 2 economy to grow at a 5% annual pace this year. But it also warned that consumer-friendly reforms are needed to sustain strong, high-quality growth.
