2023-11-27 17:13:10
US Stock Market Falls as Bond Yields Decline, Causing Caution Among Investors
After four consecutive weeks of gains, US stock markets opened the trading week on Monday with rates falling. The US 10-year bond yields fell by 3 basis points to a level of 4.453%, causing caution among investors as they prepare for the release of important inflation data later in the week.
As of 16:45, the index fell 0.15%, the S&P 500 weakened 0.25%, and the Nasdaq lost 0.2%. The leading indices on Wall Street closed last week with sharp gains, marking the fourth week in a row for the three indices. The gains in the stock market were attributed to the declines in US bond yields and macro data showing a cooling of inflation in the US, potentially signaling the end of the Federal Reserve’s rate hike cycle.
Since the beginning of November, the index has risen by 12%, the S&P 500 has climbed more than 9%, and the Nasdaq has risen by almost 11%. However, as we get closer to the end of the month, investors are developing a degree of caution after these sharp increases, especially in preparation for the publication of important inflation data later this week.
The Fed’s preferred inflation measure, the Core PCE Price Index, is due to be released on Thursday, and is expected to rise only 0.1% in November, showing a decrease from 0.4% in September. Meanwhile, core inflation rates, which do not include food and fuel costs and are considered a better measure of underlying inflation, are expected to increase by 3.5% on an annual basis, representing a decrease from 3.7% the previous month and the lowest figure since mid-2021. Data for October was also published during trading on Monday.
Additionally, this week will see the first estimate of the US GDP in the third quarter, the weekly report on jobless claims, and personal income and spending data. The retail sector is also in the spotlight as investors look for updates on the extent of US consumer shopping on Black Friday and Cyber Monday. Several US retail giants have warned in their quarterly reports that US consumer spending is weakening as shoppers face the financial pressure of rising prices and high interest rates. However, shares of retail giants Amazon and Walmart were trading higher early in the day.
In addition, Crown Castle International’s stock rose 5.5% after activist investor Elliott Management revealed that it had purchased a $2 billion stake in the company. With the publication of key economic and inflation data, along with developments in the retail sector, investors are keeping a cautious eye on the US stock market as the trading week progresses.
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