NEW YORK: Wall Street stocks fell sharply early Tuesday following inflation data that has clouded the outlook for US monetary policy in an equity market seen as overbought.
Quincy Krosby of LPL Financial pointed to Monday’s manufacturing sector report showing higher costs as another sign of rising inflation at a time when oil prices are trending higher.
The probability for a June rate cut is “edging lower,” Krosby said.
“Every metric indicates this market remains overbought,” he continued, adding that at some point a pullback will materialize.
Wall St slips as yields move higher on strong manufacturing data
“The question is how much will the market pull back?” he said.
Near 1420 GMT, the Dow Jones Industrial Average was down 1.0 percent at 39,163.36.
The broad-based S&P 500 shed 1.0 percent to 5,193.47, while the tech-rich Nasdaq Composite Index dropped 1.4 percent to 16,173.06.
Health insurance stocks slid after US health officials set lower than expected reimbursements under the government Medicare program.
Dow member UnitedHealth Group tumbled 6.3 percent, while Humana slumped 13.7 percent.
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