Traders work on the floor of the New York Stock Exchange during morning trading on April 29, 2024 in New York City.
Stocks tumbled on Tuesday to close out a losing month after higher-than-expected wage data raised fresh inflation concerns ahead of the Federal Reserve's rate decision on Wednesday.
The S&P 500 dropped 1.57% to close at 5,035.69 The Dow Jones Industrial Averagefell 570.17 points, or 1.49% to finish the session at 37,815.92. The Nasdaq Composite shed 2.04% to 15,657.82.
It was a notably ugly April for the major averages, with the Dow losing 5% for its worst monthly performance since September 2022. The S&P 500 slid about 4.2% this month, and the Nasdaq lost 4.4%. The three major averages snapped five-month winning streaks.
The Labor Department said Tuesday the employment cost index, a measure of wages and benefits, added 1.2% in the first quarter, above the 1% consensus estimate from economists polled by Dow Jones. Treasury yields jumped following the data, with the 2-year yield topping 5%.
The Fed will make its interest rate decision Wednesday afternoon, and officials are likely to express a reluctance to lower interest rates any time soon as inflation data continues to point to elevated price pressures.
The new labor cost report is "not a number that will incline the Fed to change their 'there is no rush to ease' stance," said Tom Fitzpatrick, managing director for global market insights at R.J. O'Brien and Associates.
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Despite the April setback, the S&P 500 is still up more than 20% from its low last October as investors bet the economy could withstand higher rates and piled into artificial intelligence plays like Nvidia. Data in the past month raised questions about whether stubborn inflation was weakening the economy while keeping the Fed in a restrictive mode. McDonald's in its quarterly report Tuesday warned about a more selective consumer due to higher prices.
Money Report
"When you look at the size and the scope and the scale of the rally off the October lows, and then you layer on top of it, the stickiness of inflation in the end … I wouldn't be surprised to see some dampener on the market for a little period of time," Dan Greenhaus, chief strategist at Solus Alternative Asset Management, told CNBC's "Closing Bell."
Nvidia traded into the red on Tuesday, losing 1.5% in the session and falling 4% this month. The favorite AI play of investors was up for five months straight before this month. Shares of Amazon, another big winner of the bull market, dipped 3% in the session before its quarterly update due late Tuesday.
Following the Fed's decision Wednesday, investors will next need to grapple with the April jobs report Friday.
Stocks close lower, Dow notches worst month since September 2022
Stocks closed lower on Tuesday, ending the day and the month on a losing note.
The S&P 500 pulled back 1.57% to close at 5,035.69, while the Nasdaq Composite fell 2.04% to 15,657.82.
The Dow Jones Industrial Average slipped 570.17 points, or 1.49%, to finish the session at 37,815.92.
— Brian Evans
Bitcoin briefly dips under $60,000, slides to worst month since 2022
Bitcoin continued its month-long slide to close out April, falling 4% and at one point trading just below the $60,000 level.
The flagship cryptocurrency is on pace to end the month down 15% and post its first negative month in the past eight. It would be its worst month since November 2022, when FTX collapsed. It's still up 43% for 2024.
Stocks whose performance is tied to the price of bitcoin tumbled with the cryptocurrency. Crypto exchange Coinbase fell 6%, while MicroStrategy lost 15%. The software company and self-described Bitcoin development company also reported a loss for the first quarter.
In the mining sector, Marathon Digital dropped 10.5%, while Riot Platforms lost 8.5%. IREN and CleanSpark were each lower by 7%.
For more on what's in store for bitcoin in the month ahead, read our investment outlook here.
— Tanaya Macheel
Biden administration working to ease marijuana restrictions, providing a jolt to cannabis stocks
The Biden administration plans to take steps that could ultimately lead to a reclassification of cannabis, and a loosening of federal restrictions, several people familiar with the decision told NBC News.
The news sparked a rally among cannabis stocks, many of which have suffered steep double-digit declines for at least the past three years, as federal legalization efforts languished.
Take Canopy Growth. The stock jumped more than 35% in trading Tuesday. Shares have more than doubled since the start of the year. However, the market cap has shrunk considerably in recent years, after declines of 78%, 74% and 65%, respectively in 2023, 2022 and 2021, according to FactSet.
The stock of Cronos gained 12%, while Tilray popped nearly 29%. The Amplify Alternative Harvest ETF (MJ) rallied 18%.
—Christina Cheddar Berk
Dow heads for worst month since 2022
The Dow tracked for its worst month since 2022, hurt by Intel and other sold-off members.
The blue-chip average has dropped around 4.5% in April. If that holds through Tuesday's close, it would mark the worst month for the 30-stock index since September 2022, when it tumbled nearly 9%. The Dow is also on pace to post the worst monthly performance of the three major indexes.
Intel led the average down this month, plummeting more than 30%. With that, the technology stock was poised to see its biggest monthly loss since June 2002, when shares dived more than 33%.
IBM, Home Depot, Boeing and Salesforce also weighed down the index, with all four stocks sliding more than 10% in April.
Less than one third of Dow members were tracking to finish the month with gains. 3M was the biggest outperformer with a jump of more than 6%. Chevron and American Express followed, advancing more than 3% each.
— Alex Harring
Ark Innovation ETF, leading solar fund drop in risk-off trading
Two of the more speculative technology ETFs were down more sharply than the broader market on Tuesday.
The ARK Innovation ETF (ARKK) and the Invesco Solar ETF (TAN) were down 2.9% and 2.8%, respectively, in afternoon trading. Both funds have heavy exposure to growth stocks have been sensitive to moves in interest rates.
Meanwhile, the Utilities Select Sector SPDR Fund (XLU) was unchanged on the day.
Taken together, these moves suggest that Tuesday's market actions is a risk-off move ahead of Wednesday's Federal Reserve policy update.
— Jesse Pound
See the stocks making big midday moves
These are some of the stocks making the biggest midday moves:
- Eli Lilly — Shares added 5% after beating analysts' expectations for first-quarter adjusted earnings.
- Chegg — Shares sank 20% one day after the online education company issued disappointing guidance for the second quarter.
- Tesla — The electric vehicle maker slid 5.5%, giving up some of Monday's 15% rally.
— Alex Harring
16 stocks in the S&P 500 hit new 52-week highs
During Tuesday's trading session, 16 stocks in the S&P 500 hit their new 52-week highs.
These included:
- Domino's Pizza trading at levels not seen since Jan, 2022
- Dover trading at levels not seen since Jan, 2022
- GE Aerospace trading at levels not seen since Apr, 2008
- Tractor Supply trading at all-time highs back to its IPO in 1994 after being taken private by an LBO in 1982
- Carrier Global trading at all-time highs back to its spin-off from United Technologies in Mar, 2020
On the other hand, three stocks hit new 52-week lows: Warner Bros. Discovery, Bristol-Myers and VeriSign.
— Lisa Kailai Han, Christopher Hayes
Copper headed for worst day of the year
Copper prices are down 2.38%, on pace for the largest daily decline since December 4, 2023 when prices fell -2.44%. If Copper ends the day down more than -2.44% it will be the worst day since Oct 2, 2023 when copper fell -2.57%
Month to date, copper is up 13.9%, marking its best month since February 2021, when copper advanced 15.09%.
— Hakyung Kim, Gina Francolla
Consumer sentiment measure hits lowest level since July 2022
Consumer confidence hit its lowest level since mid-2022 in March as fears grew over employment and inflation, the Conference Board reported Tuesday.
The board's main index registered a reading of 97, below the downwardly revised 103.1 in March and missing the Dow Jones consensus estimate of 103.5. This was the lowest level for the index since July 2022, though board officials said their measure of current conditions is still at a fairly healthy level and the headline index has been in a "relatively narrow range" for more than two years.
Still, there were concerns about where things are headed. Respondents answers reflected that "elevated price levels, especially for food and gas, dominated consumer's concerns, with politics and global conflicts as distant runners-up," said Dana M. Peterson, the board's chief economist.
—Jeff Cox
Stocks open lower
Stocks opened lower on Tuesday, with higher-than-expected civilian wage data pushing Treasury yields higher.
The S&P 500 fell 0.3% while the Nasdaq Composite pulled back 0.4%. The Dow Jones Industrial Average declined 69 points, or 0.4%.
— Brian Evans
Stocks making the biggest moves premarket include Eli Lilly, 3M, McDonald’s
Check out the companies making headlines before the bell.
- 3M – Shares advanced 7.7% after the maker of industrial products posted earnings of $2.39 per share on revenues of $7.72 billion. That topped analysts' estimates of $2.10 per share on adjusted revenues of $7.63 billion, according to LSEG. 3M also said it will cut its dividend, which it had raised for 64 consecutive years, after spinning off its healthcare unit earlier this month.
- Eli Lilly — Shares popped nearly 7% after the maker of the Mounjaro diabetes and weight loss drug reported first-quarter adjusted earnings of $2.58 per share, beating the consensus estimate of $2.46, according to LSEG. Eli Lilly also hiked its full-year guidance for adjusted earnings and revenue, topping analysts' expectations.
- GE Healthcare Technologies — Shares tumbled 8.1% after the medical device maker missed first-quarter revenue estimates due to weaker sales in China and lower imaging demand.
For the full list, read here.
— Pia Singh
Employment compensation measure increased more than expected in Q1
Total compensation costs for workers rose by more than expected in the first quarter, providing another sign that inflation pressures are not going away.
The employment cost index increased 1.2% for the period, faster than the 0.9% in the fourth quarter of 2023 and higher than the Dow Jones estimate for 1%, the Labor Department reported Tuesday. The index is watched by Federal Reserve officials as a sign of underlying inflation.
On a year over year basis, the index for civilian workers rose 4.2% after having increased 4.8% for the same period in 2023.
—Jeff Cox
Eli Lilly shares jump after earnings beat
Drugmaker Eli Lilly rallied nearly 7% Tuesday premarket following its better-than-expected quarterly results.
The company also raised its full-year adjusted earnings guidance to $13.50 to $14.00 per share and revenue between $42.4 billion and $43.6 billion. Analysts surveyed by LSEG expected full-year adjusted earnings of $12.50 per share and sales of $41.44 billion.
The results and guidance raise reflect weight loss treatment Zepbound's first full quarter on the U.S. market, as well as strong sales of its blockbuster diabetes drug Mounjaro.
— Hakyung Kim
Coca-Cola slips despite earnings beat
Coca-Cola ticked lower by 0.3% in Tuesday's premarket trading despite offering stronger-than-expected earnings.
The soda maker earned 72 cents per share, excluding items, on revenue of $11.30 billion. Analysts polled by LSEG expected had forecasted just 70 cents per share and revenue at $11.01 billion.
Coca-Cola also hiked its full-year guidance for organic revenue.
— Alex Harring, Amelia Lucas
McDonald's stock slides after earnings miss
Shares of fast food chain McDonald's were nearly 2% lower in premarket trading after the company missed first-quarter earnings estimates.
McDonald's reported adjusted earnings per share of $2.70 on revenue of $6.17 billion, while analysts polled by LSEG forecast $2.72 and $6.16 billion, respectively.
Worldwide sales inched up by just 1.9% in the quarter as consumers pulled back on spending, lower than the 2.1% consensus estimate collected by FactSet. The company also reported U.S. same-store sales growth of 2.5%, below an estimate that called for 2.6%.
— Brian Evans
Europe markets open mixed
Europe stocks were mixed on Tuesday, with the benchmark Stoxx 600 index opening slightly lower and trading 0.07% lower at 8:20 a.m.
The U.K.'s FTSE 100 was up 0.38%, while France's CAC 40 was down by 0.1% and Germany's DAX was 0.1% lower.
— Sophie Kiderlin
China's factory activity expands faster then expected in April
China's factory activity climbed faster than expected in April, with the official purchasing managers' index coming at 50.4 compared with the 50.3 expected in a Reuters poll.
Factory activity expansion was lower than the 50.8 seen in March.
Separately, the non-manufacturing PMI slowed to 51.2 from 53.0, with the composite PMI for April also falling to 51.7 from 52.7.
— Lim Hui Jie
South Korea industrial production falls to a 15-month low
South Korea's industrial production fell to its lowest level in 15 months in March, according to data released by the government.
Industrial production in March fell 3.2% month over month on a seasonally adjusted basis, after rising 2.9% in February.
The March reading also marked the sharpest fall in industrial production since December 2022, according to LSEG data.
The reading fell short of a Reuters poll expectation of a 0.6% month-on-month increase.
— Shreyashi Sanyal
Japan reportedly intervened to support yen; top currency official declines comment
The volatility seen in the yen was due to an intervention by Japanese authorities, The Wall Street Journal reported late Monday.
Citing people familiar with the matter, WSJ reported that Japan intervened to prop up the yen by selling U.S. dollars and buying up yen.
The currency had weakened to a 34-year low of 160.03 against the greenback, before suddenly strengthening to around the 155 level.
Japan's top currency diplomat Masato Kanda declined to comment on whether the finance ministry had intervened, adding that authorities were ready to deal with foreign exchange matters "24 hours," Reuters reported on Tuesday.
— Lim Hui Jie
Stocks making the biggest moves after hours
Check out the companies making headlines in after hours trading.
- Paramount Global — Shares rose less than 1% after the parent of CBS television said its CEO Bob Bakish would step down and be replaced by an "office of the CEO." The news comes as Paramount posted per-share earnings of 62 cents, topping the 36 cents anticipated by analysts polled by LSEG. Otherwise, revenue of $7.69 billion missed the expected $7.73 billion.
- Chegg — The education technology stock fell more than 7%. Chegg announced a CEO change and issued disappointing second-quarter revenue guidance of $159 million to $161 million, lower than the $174 million expected by analysts polled by LSEG.
- NXP Semiconductors — Shares popped more than 5% after the chipmaker posted adjusted earnings of $3.24 per share, more than the $3.16 per share consensus estimate from LSEG. Revenue of $3.13 billion came in line with forecasts.
— Sarah Min
Stock futures open little changed Monday night
Stock futures opened little changed on Monday night.
Dow Jones Industrial Average futures rose by 2 points, or 0.01%. S&P 500 futures were flat, while Nasdaq 100 futures climbed 0.04%.
— Sarah Min
