Author: Chuck Mikolaczak
NEW YORK (Reuters) - The Nasdaq fell on Monday, while the benchmark S&P 500 rebounded from two-month lows and edged higher as U.S. Treasury yields remained elevated and investors lowered expectations for the pace of interest rate cuts by the Federal Reserve. Make a reservation.
Recent economic data points to a resilient economy and lingering price pressures, which is weighing on stocks. Comments from Fed officials pushed bond yields higher. The S&P 500 has posted weekly losses in four of the past five weeks.
Tariffs promised by President-elect Donald Trump have also heightened concerns about inflation.
U.S. Treasury yields edged higher, with the benchmark 10-year Treasury yield hitting a 14-month high of 4.805%, eventually rising 1.6 basis points to 4.79%.
The market expects the Federal Reserve to cut interest rates by about 27 basis points this year, and the probability of a rate cut in June is 52.9%.
"People are worried that we're going to see higher inflation numbers, and I'm not quite sure that's the case, but that's the concern here, and it's going to be a while before we see lower rates again," Tim said. Ghriskey, Senior Portfolio Strategist at Ingalls & Snyder, New York.
"There is an inflation issue, and higher yields in general are not a good thing for the bond market or the stock market. January 21st is coming up and, you know, we'll see what happens." The new administration does in this way. "
The Dow Jones Industrial Average rose 358.67 points, or 0.86%, to 42,297.12; the S&P 500 rose 9.18 points, or 0.16%, to 5,836.22; and the Nasdaq Composite fell 73.53 points, or 0.38%, to 19,088.10.
The Dow was boosted by UnitedHealth Group's 3.93% rise after President Joe Biden's administration proposed 2026 reimbursement rates for Medicare Advantage plans run by private insurers, which would result in a 2.2% increase in payments.
CVS Health and Humana gained about 7%, while the S&P 500 healthcare sector gained 1.27%.
Utilities and technology stocks led the decline. Bloomberg News reported that shares of Southern California utility Edison International plummeted more than 11.89% after the company was hit with a lawsuit over equipment that sparked a wildfire that swept through parts of the state.
Energy rose 2.25%, the biggest one-day gain among the S&P's 11 major sectors, as crude prices continued to rise on expectations that tougher U.S. sanctions on Russian oil will force buyers in India and China to switch to other suppliers.
Consumer price index (CPI) data and the central bank's Beige Book on economic activity are both due to be released on Wednesday and may help shape views on the Fed's policy outlook.
After the U.S. government said it would further restrict the export of artificial intelligence chips and technology, chip stocks fell, with Nvidia falling 1.97% and Micron Technology falling 4.31%. The PHLX Semiconductor Index was lower.
Moderna cut its 2025 sales forecast by $1 billion and its stock price plummeted 16.8%, becoming the biggest decliner on the S&P 500 Index.
Declining issues outnumbered advancing issues on the NYSE by a 1.02-to-1 ratio and on the Nasdaq by a 1.4-to-1 ratio.
The S&P 500 hit three new 52-week highs and 23 new lows; the Nasdaq Composite hit 23 new highs and 252 new lows.
Volume on U.S. exchanges was 14.88 billion shares, compared with the 15.73 billion share average for the full session over the past 20 trading days.
(Reporting by Chuck Mikolajczak, additional reporting by Johann M Cherian and Sukriti Gupta in Bengaluru; Editing by David Gregorio)