The US stock market experienced a downturn on Tuesday, with the Dow Jones Industrial Average continuing its longest losing streak since 1978. This decline was influenced by a surge in Treasury yields, triggered by stronger-than-anticipated November retail sales figures. The S&P 500 fell by 0.39%, and the Nasdaq Composite dipped by 0.2%, dragged down by Nvidia’s slide into correction territory. The Dow closed 267 points lower, anticipating the Federal Reserve’s final policy decision of the year.
Table Content:
Economic Indicators Point to Resilient Consumer Spending
The Atlanta Fed’s GDPNow forecasting tool indicates a 3.1% growth rate for the current quarter, slightly lower than the previous estimate of 3.3%. This adjustment reflects a slowdown in domestic manufacturing, counterbalanced by robust consumer and services spending. This positive consumer activity is further underscored by the November retail sales data.
UnitedHealth Group’s Decline Impacts Dow’s Performance
UnitedHealth Group (UNH) shares plummeted to a six-month low, contributing significantly to the Dow’s extended losing streak. The company’s stock has declined over 21% since the unfortunate passing of UnitedHealthcare CEO Brian Thompson. This decline has accounted for roughly half of the Dow’s 1,300-point loss over the past eight trading sessions.
Market Opens Soft Following Retail Sales Data
The market opened with a decline, with the S&P 500 down 0.42%, the Nasdaq down 0.54%, the Dow down 185 points, and the Russell 2000 down 0.54%. This negative opening followed the release of the surprisingly strong November retail sales figures. Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley, noted that the robust economic data could influence the Federal Reserve’s decision on interest rate cuts in January. A continued strong economy might lead to a pause in rate reductions.
November Retail Sales Exceed Expectations
US retail sales surged 0.7% in November, reaching $724.6 billion. This increase, fueled by record-breaking Thanksgiving spending, suggests continued consumer strength heading into the final months of the year. The control group number, a key indicator for GDP calculations, rose 0.4%, aligning with Wall Street forecasts and reversing October’s decline. This positive data contributed to pre-market declines in futures contracts for the S&P 500, Dow Jones Industrial Average, and Nasdaq.
Pfizer Raises 2025 Profit Forecasts
Pfizer (PFE) shares saw a pre-market boost after the company announced optimistic 2025 profit projections. The drugmaker anticipates revenue between $61 billion and $64 billion, with adjusted earnings per share between $2.80 and $3.00. This positive outlook, exceeding Wall Street expectations, resulted in a 3.3% increase in Pfizer’s pre-market share price.
Market Overview and Global Trends
Monday’s trading session saw mixed results, with significant gains in megacap tech stocks pushing the Nasdaq to a record high while the Dow continued its losing streak. Treasury bond yields reacted to S&P Global’s positive November business activity report, raising concerns about sustained economic growth and potential inflationary pressures. The November retail sales data and the Federal Reserve’s upcoming policy decisions are expected to further shape market sentiment. Globally, European markets declined amidst political uncertainty in Germany, while Asian markets remained subdued despite China’s plans for a record budget deficit.
In conclusion, the US stock market faced downward pressure due to strong economic data that raised concerns about the Federal Reserve’s future policy decisions. While consumer spending remains robust, the Dow’s extended losing streak and global market trends highlight the complexities of the current economic landscape. Investors will be closely watching the Federal Reserve’s announcements for further guidance.
