Wall Street edges lower as Powell signals caution
Wall Street indexes have traded lower after Federal Reserve chairman Jerome Powell said more evidence was needed before cutting interest rates, while gains in Tesla shares kept losses in check.
Tesla leapt 7.9 per cent to its highest since January after the company reported a smaller-than-expected 5.0 per cent drop in vehicle deliveries in the second quarter.
Stocks also pared initial losses as Fed chair Powell told a panel that recent economic data represented "significant progress" although noting the US central bank needed to see more before changing policy.
Microsoft and Apple reversed early losses, rising 0.1 per cent and 0.8 per cent.
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However, AI chip leader Nvidia dropped 2.3 per cent and tech leaders Alphabet and Meta Platforms fell 0.4 per cent and 0.5 per cent as benchmark 10-year Treasury yields hovered around multi-week highs.
"Inflation is continuing to remain sticky, interest rates continue to remain high, there seems to be a bit of rotation or at least profit taking going on in some of these names that have done really well," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
Pavlik also cited investors looking to adjust portfolios ahead of the US presidential election, as the possibility increases of a second term for former president Donald Trump.
The job openings and labour turnover survey, or JOLTS, showed job openings rose to 8.14 million in May, versus expectations for 7.910 million.
The data is the first in this week's series of US jobs reports, particularly Friday's closely watched release of June non-farm payrolls, which will be crucial in assessing whether the US labour market remains resilient against the backdrop of decades-high interest rates.
As recent data signals a renewed moderation in inflation and some signs of economic weakness, market participants are holding on to their bets of about two interest rate cuts by this year-end, pricing in a 69 per cent chance of easing starting in September, as per LSEG's FedWatch data.
Tesla's gains lifted the S&P 500 consumer discretionary subsector while the health sector led declines.
In early trading on Tuesday, the Dow Jones Industrial Average was down 38.01 points, or 0.10 per cent, at 39,131.51, the S&P 500 was down 7.23 points, or 0.13 per cent, at 5,467.86, and the Nasdaq Composite was down 19.51 points, or 0.11 per cent, at 17,859.79.
Trading volumes are expected to be light throughout the week, with the equity market closing early on Wednesday and shut all day on Thursday for US Independence Day.
Among stocks, the US listing of Novo Nordisk lost 3.6 per cent after US President Joe Biden and Senator Bernie Sanders called on the Danish drug maker to cut prices of its Ozempic and Wegovy drugs.
Rival Eli Lilly dropped 3.2 per cent.
Paramount Global climbed 3.9 per cent after billionaire Barry Diller's digital-media conglomerate IAC is exploring a bid to take control of the media giant.
Advancing issues outnumbered decliners by a 1.66-to-1 ratio on the NYSE.
Declining issues outnumbered advancers for a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and four new lows while the Nasdaq recorded 22 new highs and 89 new lows.