NEW YORK: US stocks slipped Tuesday despite a strong suite of US company earnings, as robust retail sales data reignited fears that interest rates will stay higher for longer to control inflation.
Earlier Tuesday, retail sales data for September came in stronger than expected, supported partly by sales in the auto sector and at gasoline stations.
Around 15 minutes into trading, the Dow Jones Industrial Average was down 0.2 percent at 33,905.56.
The broad-based S&P 500 was down 0.7 percent at 4,342.50, while the tech-rich Nasdaq Composite index was trading down 1.3 percent at 13,394.13.
The resilient retail sales data fueled concerns that the Fed may have to keep interest rates higher for longer to bring high inflation back down to its long-term target of two percent.
Some analysts even saw signs the Fed could plough ahead with a 12th rate hike later this year if retail sales keep up their current pace.
“There’s been a consensus that the consumer would begin to pull back spending, and this report defied consensus estimates,” Quincy Krosby from LPL Financial told AFP.
“If consumer spending continues at this pace, it increases the probability for potential rate hike at the December meeting,” she added.
Before markets opened, a suite of large US companies reported earnings that beat estimates, including Goldman Sachs and Bank of America (BoA).
Among individual firms, Goldman was trading down around 0.3 percent, while BoA was up by the same amount.
“The good earnings news may be deemed good at another time, but it seems to be just hanging out there at the moment,” Patrick O’Hare from Briefing.com wrote in a note before markets opened.
He said the positive corporate news is being overshadowed by “a continued rise in Treasury yields, lingering uncertainty about the evolution of the Israel-Hamas war, and political uncertainty here at home as the House tries to fill a vacant Speaker chair.”