US stocks pause rally as Treasury yields jump ahead of CPI

U.S. stocks took a breather from their recent melt-up Tuesday, pressured by a surge in Treasury yields just a day ahead of fresh inflation data.  

At 1.08 p.m. ET (1808 GMT), the Dow Jones Industrial Average fell 361 points, or 0.8%, the S&P 500 index fell 0.6%, and the NASDAQ Composite fell 0.5%.  Yields jump CPI data, Fedspeak awaited 

Treasury yields jumped Tuesday, with the 10-year rising 9  basis points as investors grow wary ahead of key consumer price index inflation data due on Wednesday. 

Inflation is expected to have remained steady in October from the prior month amid continued resilience in the US economy, but any signs of elevated inflation could potentially delay the Federal Reserve’s plans to cut interest rates further. 

The Fed cut rates by 25 basis points last week, and reiterated that it would maintain a data-driven approach to further easing. 

Recent signs of sticky inflation spurred some doubts over just how much further interest rates will fall. Traders were seen pricing in a 70.7% chance for another 25 bps cut in December, and a 29.3% chance rates will remain unchanged, CME Fedwatch showed.

Beyond the CPI data, focus this week is also on addresses from a slew of Fed officials for more insight into the central bank’s plans for rates.

Richmond Fed President Thomas Barkin said Tuesday that the labor market is resilient, but the Fed is in position to respond to risks as needed.  Earnings parade continues 

The quarterly corporate earnings season is beginning to ebb, although several firms are still due to unveil their latest results.

Home Depot (NYSE:HD ) stock fell 0.9% after the DIY retailer raised its annual same-store sales forecast, betting on resilient demand from professional contractors to offset weak spending on bigger projects such as kitchen renovations.

Shopify (NYSE:SHOP ) stock soared 25% after the Canadian e-commerce retailer forecast fourth-quarter revenue growth above estimates, while Live Nation Entertainment (NYSE:LYV ) stock rose nearly 5% after the entertainment giant beat estimates for third-quarter profit, helped by cost controls and the high prices of concert tickets.

Hertz (NASDAQ:HTZ ) stock fell 3% after a wider-than-expected third-quarter loss and missed revenue estimates on Tuesday, hurt by depreciation charges from its fleet vehicles.

Tyson Foods (NYSE:TSN ) stock gained 8.1% after the food giant reported better-than-expected fourth-quarter earnings and revenue while also providing an optimistic outlook for fiscal 2025.

Meanwhile, Spotify (NYSE:SPOT ) is tipped to post its numbers after the closing bell. The Swedish audio streaming giant, which has slashed headcount and reduced its marketing budget this year in a bid to corral expenses, delivered profit that just topped projections in the second quarter.   (Peter Nurse, Ambar Warrick contributed to this article.)

Source: Investing.com