Stocks ended lower Tuesday, as investors hit pause on the post-election rally amid early concerns over the fate of U.S. policy toward China under President-elect Donald Trump.
The Dow Jones Industrial Average lost 382.15 points, or 0.86%, to finish the session at 43,910.98, while the S&P 500 slipped 0.29% to close at 5,983.99 and the tech-heavy Nasdaq dropped 0.09% to end the day 19,281.40.
Both the S&P 500 and the Nasdaq snapped five-day win streaks.
"There's a heavy calendar of 16 Fed speakers this week and markets should be able to gauge their collective view on whether the Fed is inclined to continue a series of rate cuts at a steady meeting by meeting pace," said Quincy Krosby, chief global strategist for LPL Financial.
Following the election, Krosby said there are also questions as to the extent and timing of the Trump administration's tariff agenda and the ensuing effect on prices and inflation, which would impact the dollar.
"Inflation-related data releases take on heightened importance as markets try to ascertain whether the Fed can, absent weakness in the labor market, deliver the rate cut cycle it had expected just a few months ago." he said, "and whether the already extended market can withstand the possibility that the Fed could remain higher for longer."
Updated at 1:46 PM EST
More Tuesday red
Treasury yields are moving faster into the afternoon session, with 10-year notes now 13 basis points higher than last week's close and trading at 4.428% and 2-year notes pegged at 4.342%.
The moves are blunting risk appetite and triggering some profit-taking in stocks, with the S&P 500 down 20 points, or 0.33% and the Nasdaq slipping 40 points, or 0.2%. The Dow was last marked 245 points lower.
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Updated at 12:19 PM EST
No deal
UnitedHealth (UNH) shares moved lower in early afternoon trading after the Justice Department filed a lawsuit seeking to block its takeover of home healthcare group Amedisys (AMED) .
UnitedHealth agreed to the $3.3 billion deal last year, sweeping in to stop Amedisys' sales to Option Care Health (OPCH) with a $100 per share cash offer. Bloomberg first reported Tuesday that the DoJ, which has long opposed the deal, has filed to challenge it.
"Eliminating the competition between UnitedHealth and Amedisys would harm patients who receive home health and hospice services, insurers who contract for home health services, and nurses who provide home health and hospice services," the DoJ said.
UnitedHealth shares were marked 1.4% lower at $616.43 each while Amedisys fell 1.4% to $91.39 each. % and the Nasdaq
UnitedHealth/Amedisys: DOJ Leans Toward Suing to Block Deal as Early as This Week $AMED $UNH https://t.co/lQ9TrzQfLp
— The Capitol Forum (@Capitol_Forum) November 12, 2024
h/t @saniya_rao & @jbliss1987
Updated at 11:09 AM EST
Boeing broken
Boeing (BA) shares extended declines in early trading after the planemaker noted just 14 aircraft deliveries over the month of October, a near 60% slump from the same period last year and the fewest since 2020, as the weeks-long strike by machinists crippled its overall production.
The group also noted that it will take "several weeks" to get back into full swing following last month's labor agreement with the machinists' union, as it looks to grow its 737 production rate to around 38 planes per month.
Boeing shares were last marked 2.27% lower in late-morning trading and changing hands at $145.48 each, extending their six-month decline to around 19%.
Boeing Reports 335 Net Orders Through October 31, Delivers 305 Airplanes YTD, Including 234 737 MAX Jets; October Deliveries Fall To 14 Commercial Jets, Down From 34 In 2023; Production Restart Expected In Several Weeks $BA
— FSMN (@faststocknewss) November 12, 2024
Updated at 10:49 AM EST
Bonds are back
The bond market's return from Monday's Veterans' Day observance has added a headwind to stocks this morning, with benchmark 10-year note yields rising 7 basis points from Friday levels to around 4.371% in early trading.
That move, which was paired with a smaller 2 basis point rise in 2-year notes, which are trading at 4.317%, comes ahead of tomorrow's October CPI inflation report, which is expected to show a modest uptick in headline price pressures and a flat core reading of 3.3%.
The two major explanations being put forward by analysts for today’s move up in US bond yields are not mutually exclusive:
— Mohamed A. El-Erian (@elerianm) November 12, 2024
Talk of actual and possible appointments to the President-Elect’s Administration who favor the use of tariffs as a national security tool and not just an… pic.twitter.com/hRxjVxudQE
Updated at 9:34 AM EST
Flat open
The S&P 500 was marked 1 point, or 0.02% lower in the opening minutes of trading, with the Nasdaq slipping 25 points, or 0.12%.
The Dow, boosted by Honeywell and Home Depot, was marked 90 points higher while the mid-cap Russell 2000 index fell 14 points, or 0.37%.
S&P 500 Opening Bell Heatmap (Nov. 12, 2024)$SPY -0.05%🟥$QQQ -0.09%🟥$DJI +0.07%🟩$IWM -0.43%🟥 pic.twitter.com/eIBL6NgEL5
— Wall St Engine (@wallstengine) November 12, 2024
Updated at 8:54 AM EST
Honey do-list?
Honeywell International (HON) shares surged in early Tuesday trading after activist investors at Elliott Management pushed the industrial group to separate into two separate stand-alone companies.
Elliott said it now has a $5 billion stake in the Charlotte, North Carolina-based group, its single-largest position, and wants it to spin-off its aerospace and automation division. Dan Loeb's Third Point made a similar case in to former CEO Darius Adamczyk in 2017.
Honeywell shares were marked 6.55% higher in premarket trading to indicate an opening bell price of $240.00 each.
The activist stake in $hon this morning just 5 weeks after this massive position in far otm calls was built, very nice pic.twitter.com/RcotLw1J5H
— jbulltard (@jbulltard1) November 12, 2024
Updated at 7:32 AM EST
Home game
Home Depot (HD) shares jumped in early Tuesday trading after the home-improvement retailer posted better-than-expected fiscal-third-quarter earnings and lifted its full-year profit forecast, thanks in part to a boost in spending tied to extreme weather in the Southeast.
A modest improvement in consumer spending, as well as what could be a bottoming-out of the U.S. housing market, also helped the group trim its expected same-store sales decline forecast heading into the final months of the year.
Home Depot shares, a Dow component, were marked 1.7% higher in premarket trading to indicate an opening bell price of $415.05 each.
Related: Home Depot stock leaps after Q3 earnings, 2024 forecast boost
Stock Market Today
Stocks finished modestly in the green on Monday, with the S&P 500 posting its 51st record closing high of the year and the Dow ending firmly north of the 44,000 point mark.
Gains were pared in the late afternoon session, however, as investors worried that the market's post-election rally, which has lifted the S&P 500 by around 5%, has stretched stock valuations beyond their fair value.
Bond markets are also back in business Tuesday following yesterday's Veterans' Day observance, and higher Treasury yields are blunting some of the market's enthusiasm for risk heading into tomorrow's October CPI inflation report.
Benchmark 10-year note yields rose 5 basis points from last week's levels and were marked at 4.349% heading into the New York trading session, with 2-year notes pegged at 4.302%.
The U.S. dollar index, meanwhile, was marked at a four-month high of 105.841 against a basket of six global currency peers.
Some of the market's caution was tied to the early composition of President Donald Trump's cabinet, which is reportedly set to include China hawks Marco Rubio of Florida as secretary of state, Mike Waltz as national security adviser and Robert Lighthizer as U.S. trade representative.
Trump's choice for National Security Advisor, Mike Waltz, and Secretary of State, Marc Rubio, point towards a tougher US policy towards the emerging axis of autocrats, namely China and Iran, but also potentially Russia.
— Ulrich Speck (@ulrichspeck) November 12, 2024
Lighthizer is "an arch hawk on trade – although it should be no surprise for the market that he has been picked," said ING's global head of markets, Chris Turner.
"We have assumed late 2025/early 2026 for the introduction and ratcheting up of tariffs, since it takes time to conduct trade investigations, (but) some reports suggest tariffs could come earlier and could piggyback off of the results of existing trade findings," he added.
Related: Analysts revisit Nvidia stock price targets with Q3 earnings in focus
Bitcoin, another asset moving directly as a result of Trump administration expectations, traded just shy of the $90,000 mark in overnight dealing, extending its post-election surge to around 30%.
On Wall Street, stock futures suggest a modest early pullback at the start of trading, with the S&P 500 called 10 points lower and the Dow looking at a 55-point decline.
The tech-focused Nasdaq, meanwhile, is called 45 points lower. Tesla (TSLA) was falling 4.1% in premarket trading amid concern about its ties to China. Nvidia (NVDA) extended yesterday's decline into a second session following a report that Taiwan Semiconductor was ordered by U.S. officials to stop high-tech shipments to China.
More Wall Street Analysts:
- Analysts reboot Snap stock price target after earnings
- Analysts reset Meta stock price target after earnings
- Analysts update Reddit stock price target after earnings
In overseas markets, Europe's Stoxx 600 fell 1.05% in early Frankfurt trading, weighed down by stocks tied to China risk and a muted reading of German investor sentiment for the month of November.
A reading of regional and German state inflation pressures was largely in line with analysts' forecasts.
Overnight in Asia, China stocks slumped across the board, dragging the MSCI ex-Japan benchmark 2.04% lower into the close of trading, on concern about the new Trump appointments and their impact on trade policy.
Japan's Nikkei 225, meanwhile, snapped a three-day winning streak and ended 0.4% lower in Tokyo as chips stocks fell and trade tensions weighed on export stocks.
Related: Veteran fund manager sees world of pain coming for stocks
