Wall Street stocks fall amid rise in US retail sales

WALL STREET stocks finished lower on Wednesday after upbeat December US retail sales data eroded expectations the US Federal Reserve will kick off its rate cut campaign as early as March.

The benchmark S&P 500 fell to its lowest in over a week.

Amazon, Nvidia, and Alphabet dipped between 0.5% and 1% and weighed on the S&P 500 as the 10-year Treasury yield rose to over 4.1%, its highest this year.

Tesla dropped 2% after the electric vehicle maker slashed prices of its Model Y cars in Germany a week after reducing prices for some China models.

The interest rate-sensitive S&P 500 real estate sector index tumbled 1.9%.

Data showed discounts from retailers and increased motorvehicle purchases supported a higher-than-expected rise in US retail sales, keeping the economy on a solid footing in 2024.

That reinforced the view that the Fed may not cut rates as quickly as previously expected this year.

Traders’ expectations of a 25-basis-point Fed rate in March dipped to 55%, from around 60% before the data was released.

US stocks in recent weeks have relinquished some gains from a strong final two months of 2023.

The CBOE Market Volatility Index, a market fear gauge, rose to an over two-month high of 15.40 points during the day.

Morgan Stanley fell 1.8% after analysts cut their ratings and price targets in the wake of the bank’s fourthquarter earnings. Bank of America and Citigroup each lost about 1%.

The S&P 500 declined 0.56% to end at 4,739.21 points.

The Nasdaq fell 0.59% to 14,855.62 points, while Dow Jones Industrial Average slid 0.25% to 37,266.67 points.

The small-cap Russell 2000 index dropped 0.7% and closed at its lowest in over a month.

Declining stocks outnumbered rising ones within the S&P 500 by a four-to-one ratio.

The S&P 500 posted 24 new highs and five new lows; the Nasdaq recorded 47 new highs and 219 new lows.

Volume on US exchanges was relatively light, with 11.8 billion shares traded, compared to an average of 11.9 billion shares over the previous 20 sessions. —