Wall Street retreats on mixed economic data, ASX set to slide
Stan Choe
The U.S. stock market is falling on Tuesday following mixed data on the strength of the economy, doing little to ease uncertainty about where interest rates might go.
The S&P 500 fell 0.6 percent in afternoon trading, remaining slightly below last week’s all-time high. The Dow Jones Industrial Average was down 342 points, or 0.7 percent, in afternoon trading and the Nasdaq composite was 0.3 percent lower.
The Australian share market is poised for a decline, with futures pointing to a 15 point, or 0.2 per cent, decline at the open. The ASX lost 0.4 per cent on Tuesday. The Australian dollar was lower at US66.30¢ at 5.07am AEDT.
Treasury yields eased slightly after a larger initial decline after a report said the U.S. unemployment rate was at its worst level since 2021 last month, but employers also added more jobs than economists expected. Meanwhile, a separate report said a key indicator of revenue for U.S. retailers rose more in October than economists expected.
Mixed data initially caused Treasury yields to fall in the bond market. The immediate reaction appeared to be that the reports could encourage the Federal Reserve to view the slowing job market as the biggest threat to the economy, rather than higher inflation, and cut interest rates further in 2026. But yields quickly recovered and then drifted up and down.
What the Fed does with interest rates is one of the most important factors for Wall Street because lower interest rates can provide support to the economy and investment prices even if it worsens inflation. A report coming Thursday will show just how bad inflation was last month, and economists expect it to show that prices for U.S. consumers are continuing to rise faster than anyone expected.
A report published on Tuesday, after US stocks began trading, suggested price pressures had increased sharply, with average selling prices of businesses rising at one of the fastest rates since mid-2022. Preliminary data from S&P Global also said growth in overall business activity fell to its weakest level since June.
“Tariffs are again widely blamed for higher prices, and the initial impact on manufacturing is now increasingly trickling down to services to widen the affordability challenge,” according to Chris Williamson, chief business economist at S&P Global Market Intelligence.
In the bond market, the yield on the 10-year Treasury note fell from 4.18 percent to 4.15 percent at the end of Monday. The two-year Treasury bond yield, which more closely tracks expectations for the Fed, fell from 3.51 percent to 3.48 percent.
The broader market was mainly driven by constant swings in stocks caught up in the AI technology craze.
Oracle rose 1 percent and Broadcom fell 0.1 percent. Although both reported stronger profits than analysts expected in the latest quarter, both suffered sharp losses last week.
But CoreWeave, which leases access to top-notch AI chips, fell 5.4 percent.
Questions remain about whether all the spending on AI technology will produce the kind of profits and productivity that are worth the expense.
Elsewhere on Wall Street, Pfizer fell 4.6 percent after forecasting profits in 2026 that were below some analysts’ expectations. Its revenue forecast of $59.5 billion to $62.5 billion ($89.7 to $94.3 billion) next year was close to analysts’ expectations.
Kraft Heinz rose 0.9 percent after Kellanova’s latest CEO, Steve Cahillane, said he would take over as CEO on January 1. Following the split of Kraft Heinz into two companies, which is expected to occur in the second half of 2026, Cahillane will head the company, which will retain the Heinz, Philadelphia and Kraft Mac & Cheese brands.
Indices on stock markets abroad fell across much of Europe and Asia.
Japan’s Nikkei 225 index fell 1.6 percent ahead of expectations that the Bank of Japan will raise interest rates at the end of this week.
Other markets in Asia have also experienced some of the sharper fluctuations in the world. While the Kospi index in South Korea fell by 2.2 percent, the indices fell by 1.5 percent in Hong Kong and 1.1 percent in Shanghai.
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