S&P 500 Closes Lower Amid Rising Treasury Yields

Investing.com– The S&P 500 closed lower on Tuesday, taking a breather from its recent upward trend, pressured by a surge in Treasury yields just a day ahead of fresh inflation data.

At 4.00 p.m. ET (2100 GMT), the Dow Jones Industrial Average fell 382 points, or 0.6%, the S&P 500 index decreased by 0.3%, and the NASDAQ Composite dipped by 0.1%.

Yields Jump; CPI Data and Fedspeak Awaited

Treasury yields surged on Tuesday, with the 10-year Treasury yield rising by 9 basis points as investors became cautious ahead of key consumer price index (CPI) inflation data due on Wednesday.

Inflation is anticipated to have remained steady in October from the previous month, reflecting the ongoing resilience in the US economy. However, any indication of elevated inflation could potentially delay the Federal Reserve's plans for further interest rate cuts.

The Fed had cut rates by 25 basis points last week and reiterated a data-driven approach for future easing. Recent signs of persistent inflation have raised doubts about the extent to which interest rates will decrease. Traders are pricing in a 70.7% chance for another 25 bps cut in December, and a 29.3% probability that rates will remain unchanged, according to CME Fedwatch.

In addition to the CPI data, there will also be addresses from several Fed officials this week for more insights into the central bank’s rate plans.

Richmond Fed President Thomas Barkin mentioned on Tuesday that while the labor market is resilient, the Fed is poised to respond to risks as necessary.

Earnings Parade Continues

The quarterly corporate earnings season is beginning to wind down, although several firms are still expected to release their latest results.

Home Depot (NYSE:HD) stock fell 1.3% after the DIY retailer raised its annual same-store sales forecast, citing strong demand from professional contractors while offsetting weak spending on larger projects like kitchen renovations.

Shopify (NYSE:SHOP) stock surged by 20% after the Canadian e-commerce retailer forecasted fourth-quarter revenue growth above expectations, while Live Nation Entertainment (NYSE:LYV) stock increased by 5% after beating third-quarter profit estimates, supported by cost control measures and high concert ticket prices.

Hertz (NASDAQ:HTZ) stock rose by nearly 9% despite a wider-than-expected third-quarter loss and missed revenue estimates due to depreciation charges from its fleet vehicles.

Tyson Foods (NYSE:TSN) stock gained over 6% after reporting better-than-expected fourth-quarter earnings and revenue, along with an optimistic outlook for fiscal 2025.

Beyond earnings, Netflix Inc (NASDAQ:NFLX), up nearly 2%, was also in the spotlight after announcing that the advertising-tier of its streaming service now hosts 70 million monthly active users.

*(Peter Nurse, Ambar Warrick contributed to this article.)