US Stocks Set For Worst Month In 2024 Before Fed: Markets Wrap

(Bloomberg) -- The stock market came under renewed pressure after the latest batch of economic figures showed a plunge in consumer confidence and persistent wage pressures in the run-up to the Federal Reserve decision.

Equities remained on pace for their worst month since September on speculation the Fed will keep rates unchanged at a two-decade high on Wednesday. And officials are unlikely to lower them anytime soon. That perception also drove bond yields up alongside the dollar.

The last time Fed Chair Jerome Powell spoke he pointed to the lack of further progress on bringing inflation down, and to enduring strength in the labor market. The latest price data — in tandem with expectations for a robust employment report on Friday — aren’t likely to lead him to change his tune.

“Powell will need a lot more convincing at this point,” said Ian Lyngen at BMO Capital Markets.

The S&P 500 hovered near 5,100. Treasury 10-year yields rose five basis points to 4.67%. The greenback gained against all of its developed-market counterparts. Amazon.com Inc.’s “show-me” moment will arrive later Tuesday when its earnings become the latest litmus test on appetite for heavy artificial-intelligence spending.

Corporate Highlights:

• McDonald’s Corp. results fell short of expectations in the first quarter, hampered by slowing growth in the US and the reverberations of the Israel-Hamas war.
• Coca-Cola Co. issued a more optimistic 2024 forecast after first-quarter results outpaced Wall Street’s expectations as customers in markets around the world continue to pay higher prices and drive volume growth.
• 3M Co. plans to slash its dividend, ending more than six decades of boosting the payout each year as it enters a new era following the spinoff of its health-care products division.
• Eli Lilly & Co. raised its annual outlook for sales and profit as the company races to satisfy soaring demand for its blockbuster weight-loss and diabetes drugs.
• PayPal Holdings Inc.’s payment volume climbed 14% in the first quarter on increased consumer spending globally.
• Meta Platforms Inc.’s social media platforms Facebook and Instagram are under investigation from the European Union amid concerns they’re failing to cull targeted disinformation peddled by Russia that aims to sow discord on the continent.
• Walmart Inc.’s deal to buy smart-TV maker Vizio Holding Corp. will undergo an in-depth antitrust review by the Federal Trade Commission, Vizio said Tuesday.
• Archer-Daniels-Midland Co.’s profit fell less than expected in the first quarter as an increase in the crop trader’s processed volumes helped partly offset lower pricing and margins.
• Paramount Global replaced Chief Executive Officer Bob Bakish, appointing a management committee as the board negotiates a possible change in control of the company.
• MicroStrategy Inc. posted a first-quarter loss after taking an impairment change against the value of its roughly $13 billion in Bitcoin holdings even though the cryptocurrency surged during the period.

Key events this week:

• Holiday across much of Europe, Wednesday
• Treasury’s quarterly refunding announcement, Wednesday
• US ADP employment change, JOLTS job openings, ISM Manufacturing, Wednesday
• Federal Reserve rate decision, Wednesday
• Eurozone S&P Global Manufacturing PMI, Thursday
• US factory orders, initial jobless claims, trade, Thursday
• Apple earnings, Thursday
• Eurozone unemployment, Friday
• US unemployment, nonfarm payrolls, ISM Services, Friday
• Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.3% as of 11:01 a.m. New York time
• The Nasdaq 100 fell 0.4%
• The Dow Jones Industrial Average fell 0.4%
• The Stoxx Europe 600 fell 0.5%
• The MSCI World index fell 0.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.4%
• The euro fell 0.2% to $1.0695
• The British pound fell 0.3% to $1.2525
• The Japanese yen fell 0.7% to 157.37 per dollar

Cryptocurrencies

• Bitcoin fell 2.7% to $61,269.36
• Ether fell 4.8% to $3,022.64

Bonds

• The yield on 10-year Treasuries advanced five basis points to 4.66%
• Germany’s 10-year yield advanced five basis points to 2.59%
• Britain’s 10-year yield advanced five basis points to 4.34%

Commodities

• West Texas Intermediate crude fell 1.5% to $81.41 a barrel
• Spot gold fell 1.8% to $2,294.21 an ounce

This story was produced with the assistance of Bloomberg Automation.

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