US stocks turned lower on Tuesday as investors bide their time until a key inflation report lands and potentially sheds light on the path of interest rates.
By mid-morning trading, all three major indexes reversed earlier session gains. The Dow Jones Industrial Average (^DJI) led the move to the downside, falling about 0.7%, or more than 250 points. The benchmark S&P 500 (^GSPC) dropped about 0.6%, while the tech-heavy Nasdaq Composite (^IXIC) slipped roughly 0.3%.
Stocks have become marooned ahead of the release of the Consumer Price Index on Wednesday, seen as a pivotal point for a market facing a slower next leg higher after a strong first quarter.
Investors have become increasingly less convinced the Federal Reserve will deliver on the three rate cuts it has projected for this year, given the persistent show of strength in the US economy. That has intensified the focus on the CPI print for March, and any sign that inflation has begun to cool again will be seen as an invitation for a June policy shift.
Meanwhile, fading rate-cut hopes have helped push up the 10-year Treasury (^TNX) yield near five-month highs — another potential headwind for stocks, with the 5% level seen as the key point of concern. The benchmark yield slipped about 5 basis points on Tuesday to trade around 4.4%.
At the same time, rising metals prices have sparked concerns about a feed-through effect on inflation. Copper (HG=F), a key industrial input, put on about 0.7% early Tuesday, adding to a 10% year to date gain that has prompted talk of a new bull market. Gold (GC=F) climbed above $2,380 an ounce, extending its rally to hit another fresh record.
Another catalyst on the horizon is the start of first quarter earnings season, which gets underway in earnest on Friday with results from the likes of Citigroup (C), JPMorgan (JPM), and Wells Fargo (WFC).
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Teens clamp down on spending, but not everywhere
Teens are tightening up their spending, according to Piper Sandler’s latest ‘Taking Stock’ research out this morning.
The spring survey showed that teen “self-reported” spending fell 6% year over year to $2,263, and rose only by 1% from the fall.
The biggest category winner is cosmetics.
Spending on beauty hit the highest level since spring 2018, interesting in the sense that Ulta (ULTA) CEO David Kimbell warned last week of an industry slowdown (his stock price was clobbered). E.l.f. Beauty (ELF) gained the most market share relative to its competitors, the survey showed.
Teens clamp down on their spending. (Piper Sandler) -
The PC recovery continues
Keep an eye on shares of PC makers Dell (DELL) and HP Inc. (HP) today.
PC industry firm Canalys said Tuesday that total shipments of desktops and notebooks grew 3.2% annually to 57.2 million units in the first quarter. The research outfit says this is a sign of demand building ahead of catalysts coming later this year, such as the arrival of AI PCs and the Windows 11 refresh.
“Growth in the first quarter of 2024 bodes well for a strong PC market throughout the year,” said Ishan Dutt, principal analyst at Canalys. “Vendors and the channel have been working through some final stages of inventory corrections, and macroeconomic conditions in certain markets continue to limit demand. But the strength of the refresh opportunity, particularly from businesses, is beginning to come to the fore. The market is set to go from strength to strength in the coming quarters as customers prioritize upgrades in preparation for a large-scale transition to Windows 11.”
The PC recovery continues on. (Canalys)
Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
