Seeking Alpha | Wall Street finished the day firmly lower despite afternoon efforts to pare higher
Wall Street finished Tuesday’s trading session to the downside on a day that watched the Nasdaq Composite plunge as much as 2%.
The tech focused Nasdaq Composite (COMP:IND) was the worst performer as it ended lower by 1.2%. Furthermore, the benchmark S&P 500 (SP500) handed back 0.8% and the blue-chip Dow (DJI) finished the day down by 1%.
Across sectors, six of the 11 S&P groups closed in positive territory as Energy led the way higher. On the flip side, Consumer Discretionary had suffered the most on the trading session.
Treasury yields also dipped as the longer-end U.S. 10-year Treasury yield (US10Y) moved lower by 2 basis points to 4.12% and the shorter-end U.S. 2-year Treasury yield (US2Y) pushed lower by 3 basis points to 3.57%.
The risk-off tone was compounded by a more hawkish Fed outlook, with traders continuing to fade the odds of a December rate cut. Futures now assign just a 41% chance, down from 43% Friday, marking the highest implied December rate since late August, Deutsche Bank’s Jim Reid noted.
On the geopolitical front, President Donald Trump announced that Saudi Arabia will invest up to $1 trillion in the United States.
Attention also is shifting to Wednesday’s earnings headliner, Nvidia (NVDA). “We expect Nvidia to exceed estimates and provide future earnings and revenue guidance that is higher than investors expect. It’s unlikely that Nvidia has seen any slowdown in demand for its products, even with increased competition, given how early we are in the AI cycle,” James Demmert, chief investment officer at Main Street Research said.
“Aside from Nvidia’s results, this week also sees trading updates from some large bricks and mortar retailers, including Lowe’s and Target tomorrow, and Walmart and Ross Stores on Thursday. These should provide some insight into the health of the retail consumer,” David Morrison, Senior Market Analyst at FCA stated.
“In an indication that there are some early signs of discomfort, Home Depot has just announced that it had missed its earnings expectations for the third straight quarter. It also announced a cut to its full-year forecast. The stock dropped 1.7% to trade at its lowest level since June. It has now lost 18% over the last two months,” Morrison added.
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