Traders work on the floor of the New York Stock Exchange on April 26, 2023 in New York City.
Michael M. Santiago | Getty Images
Stocks slid on Tuesday as traders assessed the latest Federal Reserve meeting minutes, where officials gave no indication of interest rate cuts.
The Dow Jones Industrial Average slipped 62.75 points, or 0.18%, to end at 35,088.29. The S&P 500 dipped 0.20%, closing at 4,538.19, while the Nasdaq Composite fell 0.59% to 14,199.98. Both the broad-market benchmark and the tech-heavy Nasdaq snapped a string of five consecutive winning days.
The Fed indicated that policy will need to remain “restrictive” amid concerns that inflation could be stubborn or tick higher. Policymakers left the benchmark rate at 5.25% to 5.5% at the conclusion of their Oct. 31-Nov. 1 meeting.
“In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time,” the minutes stated.
Fed funds futures pricing indicates near unanimity that the Federal Open Market Committee will hold steady at its upcoming December meeting, and is pricing in cuts starting in May.
“It’s possible that we’re in the middle of [an] infrequent but very significant generational regime shift. And it’s possible that we’re not going back to zero rates,” said Jon Burkett-St. Laurent, senior portfolio manager at Exencial Wealth Advisors. “That doesn’t necessarily mean that rates will go to 20% in a straight line, but it probably does mean that rates are up and down in a higher range than they were over much of the last decade.”
As rates remain “higher for longer,” housing data shows last month was difficult for prospective homebuyers. Existing home sales in October came in at 3.79 million units, versus estimates of 3.9 million, according to the National Association of Realtors. This marked the slowest sales pace since August 2010, and a 14.6% fall from the prior year.
Lowe’s declined 3.1% after reducing its full-year sales outlook. Clothing retailer American Eagle tumbled nearly 16% after weaker-than-expected operating income guidance for the full year.
Meanwhile, e-commerce giant Amazon shed 1.5% after CNBC’s David Faber reported, citing sources, that former CEO Jeff Bezos may be selling more shares. The billionaire offloaded 1.67 million shares last week.
Traders will also turn to earnings from Nvidia. Nvidia shares hit an all-time high on Monday, but dipped 0.9% on Tuesday.
Correction: Existing home sales came in at their lowest level since August 2010. A previous version misstated the year.
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