US equity indexes fell as stronger-than-expected job openings and services sent the 10-year government bond yield to an eight-month high, triggering a sharp decline in communication services and technology.
The S&P 500 fell 0.5% to 5,943.7, the Nasdaq Composite dropped 1.2% to 19,630.3, and the Dow Jones Industrial Average slid slightly to 42,695.2 in midday trading on Tuesday. Energy topped the gainers.
Nvidia (NVDA) and Palantir (PLTR) were among the worst performers in the S&P 500 and the Nasdaq, down 4.5% and 6.5%, respectively, intraday. Tesla (TSLA) joined the laggards on the S&P 500, slumping 4.1% intraday after closing at a record high on Monday.
US job openings rose to 8.098 million in November, according to the Bureau of Labor Statistics, above the 7.74 million openings expected in a Bloomberg-compiled survey and up from the 7.839 million reported in October.
The Institute for Supply Management's US services index rose to 54.1 in December from 52.1 in November, compared with the 53.5 anticipated in a Bloomberg-compiled survey. December print is the third-highest since September 2023, according to a Jefferies note.
Prices paid in the services data rose to the strongest since September 2023, and continued a 91-month streak of readings above 50, Jefferies US Economist Thomas Simons said in the note. "This is not great news for the [Federal Reserve] achieving its inflation target, but it is consistent with a strong pace of activity in the sector overall."
Jobs and services data reinforced bets the Fed would be cutting interest rates by less than the markets anticipated for this year, according to a Scotiabank note.
Most US Treasury yields climbed, with the 10-year up 6.3 basis points to 4.68%, the highest on an intraday basis since late April, according to data compiled by CNBC. The two-year yield rose 1.5 basis points to 4.29%. Higher yields tend to be negative for long-duration plays in technology, communication services, and consumer discretionary sectors.
Further, in economic news, the US international trade deficit widened to $78.19 billion in November from a $73.62 billion gap in October, versus the $78.3 billion shortfall expected in a survey compiled by Bloomberg, as imports surged.
Online shopping hit a record during the 2024 holiday season, Adobe (ADBE) Analytics' data showed. Consumer spending rose 8.7% year-over-year to $241.4 billion from Nov. 1 to Dec. 31, outpacing Adobe's September prediction of $240.8 billion.
Meanwhile, West Texas Intermediate crude oil futures advanced 0.8% to $74.17 a barrel.
Reuters reported China's Shandong Port Group, which has been accepting banned tankers at three ports in the country it controls issued a notice it will no longer accept sanctioned vessels, tightening supply as it rejects imports from Iran and Russia.
Gold futures rose 0.7% to $2,665.22 an ounce, while their silver counterpart climbed 0.4% to $30.72 per ounce.
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