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U.S. stock indexes closed lower on Tuesday as investors watched earnings reports and economic data ahead of the end of the week on inflation.
The S&P 500 fell 17.59 points, or 0.4%, to 4122.47. The Dow Jones industrial average slipped 58.13 points, or 0.2%, to 32774.41, while the tech-heavy Nasdaq Composite fell 150.53 points, or 1.2%, to 12493.93.
Investors will look ahead to expected consumer-price data on Wednesday to gauge how the Federal Reserve will conduct monetary policy at its next meeting. In recent weeks, better-than-expected corporate earnings and strong labor market data have eased fears of a U.S. recession, helping stock markets bounce back from lows.
With inflation running at a multi-decade high, investors say Wednesday’s update to the consumer-price index will be key to the outlook and market direction.
Since the mid-June lows, the market has found a risk environment and investors have interpreted the chairman [Jerome] “But today’s market is tomorrow’s market — Wednesday’s inflation data will provide a clearer picture of whether or not this bear market is truly behind us,” said Quincy Crosby, global strategist at LPL Financial.
Ms. Crosby said inflation is the No. 1 concern for the market — not just whether it’s going down, but how fast.
Shares of Roblox, Coinbase Global and Wynn Resorts fell in afternoon trading following disappointing earnings results. Chipmaker Micron Technology fell 3.7% on Tuesday after issuing an earnings warning, a day after Nvidia gave similar preliminary guidance.
Norwegian Cruise Line Holdings fell 11% after reporting a better-than-expected quarterly loss. Shares of peer cruise line Carnival Corp fell 5.4 percent as pockets of the travel sector struggled to recover from the pandemic. Investors want to see results from the Walt Disney Company.
Expected after closing on Wednesday.
Traders worked on the trading floor of the New York Stock Exchange on Monday.
Photo:
Andrew Kelly/Reuters
Brent crude fell in Tuesday’s trading, swinging 1.8% in either direction. Benchmark crude slipped into positive territory in the morning, down 0.4% at $96.31 a barrel, after Moscow cut the flow of crude oil to Europe.
“Oil prices are still driven by the recent macroeconomic outlook,” said TortoiseEcofin Managing Director and Senior Portfolio Manager Robert Thummel. “There remains concern that the Federal Reserve will continue to slow the economy if Wednesday’s inflation data comes in better than expected, but markets still recognize that tight supply and strong demand will put significant pressure on oil prices.”
Data released Tuesday showed that U.S. labor productivity fell for the second straight quarter and labor costs were higher than economists expected.
The 10-year US Treasury note rose to 2.797% from 2.763% on Monday, while the two-year yield rose to 3.284% from 3.214%. As short-term yields exceed long-term yields, the yield curve remains inverted, a key indicator of recession.
Overseas, the Stoxx Europe 600 fell 0.7%, with losses led by travel and technology firms. Stock markets in Asia are mixed. In Japan, the Nikkei 225 fell by 0.9%, and in China, the Shanghai Composite index increased by 0.3%. In Hong Kong, the Hang Seng index weakened by 0.2 percent.
Write to Will Horner at william.horner@wsj.com and Eric Wallerstein at eric.wallerstein@wsj.com
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In the year In the August 10, 2022 issue of ‘Inflation Reports, Stocks Fall.’
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