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By 16:00 ET (21:00 GMT), the Dow Jones Industrial Average was down 94 points, or 0.3%, the S&P 500 fell 0.5%, and NASDAQ Composite fell 0.6%.
U.S. Treasury yields continued to climb higher, with the yield on the 10-year Treasury note rose further above 4% to hit highest level this year after U.S. retail sales rose 0.6% in the month of December, topping expectations for 0.4%. Signs of a stronger consumer, which makes up about two-thirds of economic growth, suggesting the economy remains in good share dented expectations for a rate cut as soon as March.
“A stronger-than-expected showing in retail spending reinforces the notion of an ongoing sound and resilient consumer, and more broadly, solid growth,” Stifel said in a note.
The odds of a March rate cut fell to about 50% from 61% a year earlier, according to Investing.com’s Fed Rate Monitor Tool.
The data also added clout to remarks from Federal Reserve Governor Christopher Waller who indicated on Tuesday that while interest rate cuts were likely to happen this year, the central bank wasn’t considering any in the near-term, citing continued resilience in the U.S. economy.
The banking sector remained in the spotlight Wednesday, with Charles Schwab (NYSE:SCHW) stock fell 1% after the financial services group reported a 22% dip in net profit in 2023, saying it dealt with “challenges” posed by a tighter interest rate environment.
Interactive Brokers (NASDAQ:IBKR) rose 2% after fourth-quarter revenue topped analyst estimates, though earnings fell short of expectations as net interest income fell in Q4.
The ban on the sale of Apple Watch models with the blood oxygen feature in the U.S. will be reinstated on Thursday after The U.S. Court of Appeals for the Federal Circuit today denied Apple’s request to continue to allow imports of the watches amid a patent dispute with medical device maker Masimo (NASDAQ:MASI).
Apple was banned from selling its watches that included the feature to monitor blood-oxygen levels in the U.S. on Dec. 26, but the ban was temporarily lifted a day later after Federal appeals court granted Apple’s emergency request to pause to consider the company’s request for a longer lift of the ban.
Tesla Inc (NASDAQ:TSLA) fell 2% after slashing the price of its Model Y prices in Europe, triggering fresh concerns about margin pressures following several price cuts last year.
The latest slump in the EV maker comes a day after Elon Musk said he would prefer to “build products outside of Tesla” unless the board raises his stake in the company to 25% from his current stake of 13%.
Boeing Co (NYSE:BA), meanwhile, rose 1% after the Federal Aviation Administration said it had completed preliminary inspections on 40 Boeing 737 Max 9 airplanes, raising hopes of an eventual ungrounding of the airplanes. Boeing 737 Max 9 airplanes have been grounded indefinitely for new safety checks after an Alaska Airlines MAX 9 jet was forced into an emergency landing following a cabin panel blowout mid-flight.
Walt Disney (NYSE:DIS) stock fell 3% after the entertainment giant rejected nominees to its board of directors put forward by activist investors, saying its current leadership team has made “considerable” progress in executing a sweeping overhaul of the company.
Energy stocks ended nearly 1% lower as oil prices even as oil prices rebounded from session lows following disappointing growth data from China, the world’s second-largest crude consumer, raised concerns about future demand increases.
EOG Resources Inc (NYSE:EOG), Marathon Oil Corporation (NYSE:MRO), and Valero Energy Corporation (NYSE:VLO) were down more than 1%.
(Peter Nurse, Oliver Gray contributed to this article.)
