Wall Street rally cools/ stock market slip/ Treasury yields rise/ McDonald’s E.coli outbreak/ Starbucks sales drop/ financial markets today/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ U.S. stocks fell on Wednesday, marking a slowdown in Wall Street’s recent rally. The S&P 500 dropped 0.3%, heading toward its first three-day losing streak since September. Treasury yields rose, adding pressure on stocks, while companies like McDonald’s and Starbucks reported negative news that weighed down the market.
Wall Street Dips as Record Rally Eases – Quick Look
- S&P 500 drops 0.3% as Wall Street’s rally cools.
- McDonald’s falls 6.1% due to an E.coli outbreak linked to its Quarter Pounder burgers.
- Starbucks sinks 1.9% on weaker U.S. sales and pulled forecasts for 2025.
- Treasury yields continue to rise, putting pressure on high stock prices.
- Texas Instruments and Northern Trust report stronger-than-expected earnings, helping limit losses.
Wall Street Slips as Recent Rally Loses Momentum
Deep Look
Wall Street’s record-breaking rally took a breather on Wednesday, as U.S. stocks slipped after weeks of gains. The S&P 500 fell 0.3% in early trading, on pace for its third consecutive day of losses. After a six-week rally—the index’s longest this year—the market has begun to cool down as investors reassess stock valuations.
The Dow Jones Industrial Average dropped 234 points, or 0.5%, while the Nasdaq composite also fell 0.5%. The pullback follows two minor declines earlier in the week, after the S&P 500 hit an all-time high last Friday.
Corporate Woes Add Pressure
Several high-profile companies contributed to the market’s decline. McDonald’s shares dropped 6.1% after federal health officials linked its Quarter Pounder burgers to an E.coli outbreak that has affected at least 49 people across 10 states. The Centers for Disease Control and Prevention (CDC) said McDonald’s has stopped using fresh slivered onions and quarter-pound beef patties in several states while the investigation continues.
Starbucks also weighed on the market, sinking 1.9% after reporting weaker-than-expected sales trends at its U.S. stores. The coffee giant also withdrew its financial forecasts for 2025 due to leadership changes, as new CEO Brian Niccol transitions from his previous role at Chipotle.
Gains in Tech and Finance Help Offset Losses
Despite the overall decline, some companies provided a boost to limit the market’s losses. Texas Instruments rose 3.6% after reporting better-than-expected profit and revenue for the latest quarter. While revenue from industrial users declined, the semiconductor company saw growth in other markets.
Northern Trust also climbed 4.6% after exceeding analysts’ estimates for both profit and revenue, adding some balance to the market as financial stocks fared better.
Rising Treasury Yields Add Pressure
A key factor behind the market’s cooling is the continued rise in Treasury yields, which have climbed steadily this week. On Wednesday, the 10-year Treasury yield rose to 4.24%, up from 4.21% the previous day and 4.08% last Friday. Rising yields often make bonds more attractive compared to stocks, especially when stock prices have climbed significantly ahead of corporate profit growth.
Treasury yields have been rising amid a series of strong economic reports, which suggest the U.S. economy remains resilient. This has fueled hopes that the economy may avoid a deep recession, despite earlier fears of a downturn driven by high inflation.
Global Markets Mixed
In global markets, Japan’s Nikkei 225 slipped 0.8%, despite a 45% surge in shares of Tokyo Metro Co., which made its trading debut after Japan’s largest IPO since 2018. Meanwhile, Chinese markets rose for the second day, with Hong Kong’s index gaining 1.3% and Shanghai’s up 0.5%, following the central bank’s decision to cut loan rates.
European markets were modestly lower, reflecting the caution among investors globally as they navigate ongoing inflation concerns and fluctuating economic conditions.
