NEW YORK: Wall Street’s main indexes slipped on Monday, pressured by a rise in Treasury yields and as investors digested data that pointed to softening manufacturing activity in the United States.
Declines were most noticeable in crypto stocks, with Coinbase down 5.8 percent and Bitfarms losing 6.6 percent, as bitcoin fell 6.5 percent and dropped below USD85,000, with the crypto market losing over USD1 trillion in value since hitting a record of around USD4.3 trillion, according to CoinGecko.
Strategy, the world’s largest holder of the cryptocurrency, slumped 11 percent and cut its earnings forecast for 2025, citing a weak run in bitcoin.
An ISM survey showed manufacturing activity shrank for the ninth straight month in November, as factories reported weakening new orders and rising input costs driven in part by tariffs.
Investors are parsing through a slew of data reports to gauge the Federal Reserve’s monetary policy decision when it meets in December.
While most policymakers have struck a cautious tone, dovish signals from a few key voting members, along with reports that White House economic adviser Kevin Hassett is a leading contender to succeed Powell, have stoked bets on further monetary easing in the months ahead.
Traders see an 87.6 percent chance of a 25-basis-point interest rate cut in December, roughly doubling the odds from late last month, according to CME Group’s FedWatch Tool.
Investors are also waiting for a delayed September report on the Personal Consumption Expenditures Index, the Fed’s preferred inflation gauge, due on Friday.
Robert Pavlik, senior portfolio manager at Dakota Wealth, said the lack of inflation data due to a recent government shutdown was making policymakers cautious about a potential interest rate cut.
“But I think that he (Powell) will probably err on the side of protecting the overall economy by cutting rates and then holding off after that by being more hawkish when he makes his comments after the meeting.”
At 11:41 a.m. ET, the Dow Jones Industrial Average fell 226.85 points, or 0.48 percent, to 47,489.57, the S&P 500 lost 20.26 points, or 0.30 percent, to 6,828.83 and the Nasdaq Composite lost 81.02 points, or 0.35 percent, to 23,284.67.
Eight of the 11 S&P 500 sectors were in the red, led by a more than 1 percent decline in real estate and utilities , often seen as proxies for Treasury yields.
US bond yields ticked higher in tandem with those in most developed economies, with Japanese bond yields seeing the steepest gains on expectations of an imminent rate hike by the local central bank.
Fed Chair Jerome Powell is scheduled to speak after market closes.
Declining issues outnumbered advancers by a 1.47-to-1 ratio on the NYSE and by a 1.9-to-1 ratio on the Nasdaq.
The S&P 500 posted 13 new 52-week highs and one new low, while the Nasdaq Composite recorded 60 new highs and 46 new lows.
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