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By 16:00 ET (20:00 GMT), the Dow Jones Industrial Average was down 396 points, or 1%, S&P 500 fell 0.7%, lower and NASDAQ Composite dropped 220 points, or 1%.
Treasury yields added to gains from a day earlier as the recent bout of stronger economic data and Fed speakers cooling expectations for early-rate expectations muddied the path for sooner rate cuts.
San Francisco Fed President Mary Daly echoed said Tuesday that there was no urgency to cut rates as as inflation is still above the central bank’s 2% target. Daly’s echoed Cleveland Fed President Loretta Mester, who said she sees the fed cutting rates this year, but flagged pivoting to cuts too early rather than keeping them higher for longer was the bigger risk.
The CME’s FedWatch tool now factors in around 62% odds of a Fed rate cut in June, down from about 70% probability a week ago.
The remarks arrived on the heels of data showing job openings rose 8.756M in February, from 8.748M in January, though just shy of expectations for 8.760M.
Jobs data will continue to be in focus, with the payrolls report for March slated to be released on Friday.
The U.S. economy is expected to have added 205,000 jobs in March, slowing from the 275,000 jobs added in February, amid hopes that the economy is set for a “soft landing”, in which inflation moderates but the economy avoids a severe downturn.
Health care stocks including Humana Inc (NYSE:HUM), UnitedHealth Group Incorporated (NYSE:UNH) and CVS Health Corp (NYSE:CVS) were down sharply to lead losses in the broader market after the Center for Medicare and Medicaid Services private Medicare Advantage rates will increase an average 3.7% from 2024.
The rate was unchanged from the initial proposals in January, signaling the insurers’ margins will remain under pressure next year. That took Wall Street by surprise as only once in the past 10 years have final rates not increased from the initial proposals, according to research from JPMorgan.
Tesla (NASDAQ:TSLA) stock fell 5% after the electric vehicle manufacturer reported its first-quarter delivery numbers, falling well short of the expectations.
The EV giant delivered 386,810 vehicles against the estimated 449,080, according to Bloomberg consensus.
This miss was an “unmitigated disaster,” Wedbush said in a note, and marked “a seminal moment in the Tesla story for Musk to either turn this around … otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”
Competitor Rivian Automotive (NASDAQ:RIVN) stock also fell 5% after the EV company trailed analyst consensus for first-quarter production numbers.
Other EV stocks including Nio Inc Class A ADR (NYSE:NIO), Nikola Corp (NASDAQ:NKLA) were also in the red.
Schlumberger NV (NYSE:SLB) said it struck a deal to acquire oilfield equipment maker ChampionX Corp (NASDAQ:CHX) for $7.7B in an all-stock deal, sending shares of the latter up 10%.
Elsewhere, PVH (NYSE:PVH) stock slumped over 22% after the fashion retailer, which owns the Tommy Hilfiger and Calvin Klein brands, provided disappointing full-year sales guidance, citing a difficult macroeconomic backdrop, particularly in Europe.
(Peter Nurse contributed to this story.)
