Stocks finished lower Tuesday, with the S&P 500 marking its first monthly decline since September, amid disappointing economic reports and the Federal Reserve's upcoming rate decision.
The Dow Jones Industrial Average fell 570 points, or 1.5%, to 37,815.92, while the S&P 500 lost 80 points, or 1.6%, to 5,035.69 and the tech-heavy Nasdaq dropped 325 points, or 2%, to 15,657.82.
The Dow lost 5% in April for its worst monthly performance since September 2022, CNBC reported. The S&P 500 slid about 4.2% this month, and the Nasdaq lost 4.4%.
Meanwhile, the Conference Board’s index of consumer confidence fell for a third straight month, sparking renewed stagflation concerns.
“Consumers have a more cautious outlook with fewer vacations planned and less demand for big ticket items,” said Jeffrey Roach, chief economist for LPL Financial. “Softer consumer demand would certainly release some inflationary pressure, giving investors and policy makers some reprieve on rate expectations.”
Roach said he still expects a decent jobs report on Friday “but don’t be surprised if it comes in softer than previous reports.”
Updated at 12:11 PM EDT
Extending slide
Stocks are extending their early declines heading into the afternoon session, with the S&P 500 down 38 points, or 0.76%, and the Dow off more than 330 points.
This mornings employment cost index data is the likely culprit, as the spike in wages (and more acutely, benefits) has underscored the Fed's 'last mile' inflation challenge.
The Conference Board’s index of consumer confidence, meanwhile, fell for a third straight month, setting up renewed stagflation concerns.
Quite a drop in April for expectations component in @Conferenceboard Consumer Confidence Index … now close to retesting summer 2022 low pic.twitter.com/XPpmdfOKKW
— Liz Ann Sonders (@LizAnnSonders) April 30, 2024
Updated at 10:18 AM EDT
Amazon Prime Time
Amazon shares edged lower in early trading ahead of the tech and retail giant's first quarter earnings report, slated for after the close of trading later this evening.
Analysts expect Amazon to post a bottom line of 83 cents share, with operating income of $11.13 billion, on revenue of $142.5 billion.
Amazon shares were marked 0.1% lower at $180.83 each, but have risen just over 20% since the start of the year.
Related: Amazon earnings: 5 things to focus on in the 'everything stock' update
Updated at 9:38 AM EDT
Red open
The S&P 500 opened 13 points, or 0.27% lower at the start of trading, while the Dow fell 165 points and the Nasdaq gave back 65 points, or 0.41%.
S&P 500 Opening Bell Heatmap (April 30, 2024)$SPY -0.35% 🟥$QQQ -0.40% 🟥$DJI -0.51% 🟥$IWM -1.24% 🟥 pic.twitter.com/zNNyjP1Hrk
— Wall St Engine (@wallstengine) April 30, 2024
Updated at 8:41 AM EDT
The cost of doing business
The Labor Department's Employment Cost Index for the first quarter showed a bigger-than-expected increase of 1.2%, well ahead of the analysts' 1% forecast and the 0.9% tally recorded over the final three months of last year.
Wages were up 1.1%, a level that matched the upwardly-revised fourth quarter tally, while benefit costs were up 1.1%, a big jump from the 0.7% registered over the fourth quarter.
Stocks turned lower following the data release, with futures tied to the S&P 500 indicating a 21 point opening bell decline and those linked to the Nasdaq suggesting an 88 point pullback.
Benchmark 2-year notes rose 3 basis points to 5.012% while 10-year notes rose 2 basis points to 4.659%.
The ECI came in well above expectations. And also an increase in wage growth for my preferred metric, private workers ex incentive occupations seasonally adjusted (a mouthful, and unfortunately not published by BLS).
— Jason Furman (@jasonfurman) April 30, 2024
Up at a 4.2% annual rate in the first three months of the yr. pic.twitter.com/8ELEcciuBP
Stock Market Today
Stocks ended higher on April 30, helped in part by a modest pullback in Treasury bond yields and one of the best single session gains for Tesla (TSLA) shares in more than two years as investors eyed a series of labor-market-data reports and the Fed's policy decision over the coming days.
The first of those, in fact, will fall this morning at 8:30 am. Eastern Time, when the Labor Department publishes its first quarter employment-cost index, a key measure of wage inflation that feeds into the Fed's overall forecasts.
Another active slate of earnings releases, which includes Eli Lilly, 3M and McDonald's (MCD) before the opening bell and Starbucks (SBUX) , PayPal (PYPL) and Amazon (AMZN) after the close, will also have a heavy influence on trading.
Related: Analyst unveils new Amazon price target as stock tests $2 trillion
3M (MMM) shares surged 8% after the industrial group posted stronger-than-expected first-quarter earnings of $2.39 a share and confirmed that Bill Brown will take over from Mike Roman as CEO starting May 1.
Eli Lilly (LLY) shares jumped 6.9% after the drugmaker said its Zepbound weight-loss treatment helped drive stronger-than-expected first-quarter earnings and a boost to its full-year profit forecast.
Coca-Cola (KO) shares slipped 0.2% after the drinks maker topped Wall Street forecasts on both its top and bottom lines and lifted its full-year organic-sales forecast.
McDonald's missed Street same-store sales forecasts, although revenues topped estimates at $6.17 billion, sending shares 1.1% lower.
Collective first-quarter S&P 500 profits are forecast to rise 5.6% from a year earlier to $435.3 billion, according to LSEG data, with profits over the three months ending in June rising 10.4% to $447.4 billion.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is down 2.63% for the month, are priced for a 5 point opening-bell decline.
Contracts tied to Dow Jones Industrial Average, meanwhile, are priced for a 30 point pullback while the Nasdaq is called 25 points lower.
Benchmark 10-year note yields were last seen trading at 4.634%, with 2-year notes pegged at 4.979%. The figures come ahead of the Fed's two-day policy meeting in Washington, although traders aren't expecting any change in base lending rates from the Fed statement on May 1.
In Europe, the core rate of prices eased to 2.7% in April, while headline HICP held at 2.4%. Those softer inflation data stiffened bets on a rate cut from the European Central Bank in June.
More Wall Street Analysts:
- Analyst unveils new Nike price target ahead of big summer for sports
- Analysts weigh in on Google-parent Alphabet’s stock after cloud event
- Analysts revamp Disney stock price target after proxy fight
The region's Stoxx 600 index, however, was marked 0.26% lower in Frankfurt and on pace for a monthly decline of around 0.3%. Britain's FTSE 100, meanwhile, rose 0.58% in London and looks set to book an impressive April gain of 3.3%.
Overnight in Asia, Japan's Nikkei 225 returned from its Monday holiday to book a 1.24% gain on the session. The yen held at 156.94 against the U.S. dollar amid renewed speculation of intervention from the country's finance ministry.
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