by Chibuike Oguh
NEW YORK (Reuters) – The New York Stock Exchange ended lower on Tuesday after the release of data showing rising labor costs in the United States and a decline in consumer confidence, as the meeting got underway monetary policy of the American Federal Reserve (Fed).
The Dow Jones index lost 1.49%, or 570.17 points, to 37,815.92 points.
The broader S&P-500 lost 80.48 points, or 1.57%, to 5,035.69 points.
The Nasdaq Composite fell 325.26 points (2.04%) to 15,657.82 points.
Wall Street’s three main indexes record monthly declines. The S&P-500 lost 4.2% in April, the Nasdaq 4.4% and the Dow Jones 5%. For the S&P-500 and the Nasdaq, this is a monthly percentage decline not seen since September 2023.
According to data released today, labor costs in the United States increased more than expected in the first quarter, indicating renewed wage pressures.
A separate report showed that U.S. consumer confidence unexpectedly deteriorated in April, to its weakest level in more than a year.
These data were published at the start of the two-day meeting of the Fed, which is expected to leave its interest rates unchanged on Wednesday, but from which investors await indications on the monetary easing promised this year by the American central bank.
“We still find ourselves in an environment where the first reaction is to extrapolate any data that is more important than expected and a more conservative reaction from the Fed,” commented Garrett Melson, strategist at Natixis Investment Managers in Boston.
“But nothing has changed,” he added. “Growth is still solid, the job market is holding up, and at the end of the day we are catching our breath a little in the process of disinflation.”
According to LSEG data, markets now only expect interest rates to fall by a total of 31 basis points this year, compared to 150 basis points expected at the start of the year.
All major sectors of the S&P-500 ended the session in the red, with energy and technology recording some of the biggest declines of the day.
The ‘Magnificent Seven’ of Wall Street all declined, including Amazon which published its quarterly results after the close.
Also note the 14.3% fall in GE HealthCare following disappointing quarterly results.
3M rose nearly 5% after reporting better-than-expected results for the January-March period. Eli Lilly ended up nearly 6% after raising its annual profit forecast, as did PayPal, which took 1.4%.
(Written by Jean Terzian)
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