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Stock market today: US indexes drop as investors sour on pace of Fed rate cuts

Filip De Mott   

Stock market today: US indexes drop as investors sour on pace of Fed rate cuts
  • US stocks fell sharply as investors are turning skeptical on a Fed rate cut by June.
  • The 10-year Treasury yield hit its highest since November.

US stocks fell for a third straight day Tuesday as investors digested the possibility that the first Federal Reserve interest rate cut won't come in June as expected.

Markets have been repricing bets on Fed monetary policy after a batch of strong economic data suggested conditions are still running too hot for a cut.

Odds of a June pivot briefly fell below 50% after Monday's manufacturing data came in hotter than expected. Meanwhile, the latest jobs opening figures show that demand for labor remains elevated.

With bond traders now adjusting to the prospect of fewer Fed cuts this year, the 10-year Treasury yield hit its highest since November, peaking at 4.4%.

So far, San Francisco Fed President Mary Daly noted that three rate cuts remained reasonable, while Cleveland's Loretta Mester concurred. Both officials want to see more evidence of falling inflation.

Later this week, investors can expected commentary from Chairman Jerome Powell speak on Wednesday, while the next jobs report is set to release Friday.

Here's where US indexes stood at the 4 p.m. closing bell on Tuesday:

Here's what else happened today:

In commodities, bonds, and crypto:

  • Oil prices increased. West Texas Intermediate crude oil rose by 1.76 to $85.21 a barrel. Brent crude, the international benchmark, jumped by 1.93% to $88.93 a barrel.
  • Gold climbed 1% to $2,273.34 per ounce.
  • The 10-year Treasury yield gained 3.4 basis points to 4.361%.
  • Bitcoin dropped 5.5% to $65,927.


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