All three indexes were handsomely in the black all day long, the Dow up over a hundred most of the session, then in the final half hour all came crashing down sending all three to close modestly in the red. The only explanation given for the dive is nerves over Friday’s coming PCE data and how that might impact the timing of rate cuts, though a June cut is still widely forecasted at 70.4%. Why the sudden 11^th hour anxiety 3 days ahead of the report, especially since the market already took a dive yesterday for the same reason, remains a mystery.  

The fears are that there will likely be a major crash if there’s even a hint of another hike but, of course, the Fed agrees with that and has stated the rationale for delaying the timing of the first cuts as to avoid that critical scenario altogether.  All this has been on the record for some time so today’s last minute crash makes no sense. The good news:  Orders for manufactured goods has increased as well as equipment spending, and consumer confidence remains unchanged. With the holiday week, volume remains well below average at 10.43 billion. 

Dow, S&P fall for third straight session with inflation data eyed

By Chuck Mikolajczak

Tue March 26, 2024 4:55 PM

DJ: 39,313.64  -162.26        NAS: 16,384.47  -44.35         S&P: 5,218.19  -15.99      3/25

DJ: 39,282.33  -31.31          NAS: 16,315.70  -68.77         S&P: 5,203.58  -14.61      3/26

NEW YORK, March 26 (Reuters) - U.S. stocks slipped on Tuesday, giving up modest gains late in the session to send the Dow and S&P 500 to their third straight decline, as investors awaited economic data in a holiday-shortened week to gauge the Federal Reserve's policy path.  Stocks struggled for upward momentum even as Tesla (TSLA.O), opens new tab gained 2.92% after CEO Elon Musk unveiled the electric-vehicle maker's one-month trial of its Full Self-Driving technology to existing and new customers in the United States. The stock is up about 4% for the week but remains down more than 28% for the year. 

The focus remains on a key reading of the Personal Consumption Expenditures Price Index (PCE), the Fed's preferred inflation gauge. The data is due on Friday, when U.S. markets will be shut for the Good Friday holiday.  The index is expected to have risen 0.4% in February and 2.5% annually. Core inflation, which excludes volatile food and energy components, is estimated to have advanced 0.3% last month, keeping the annual pace at 2.8%, economists polled by Reuters said.  "The big number is Friday. That's the number everyone's going to pay attention to and whatever happens in the meantime is going to be noise, so I don't anticipate a whole lot happening until we get that data point," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

"The one thing that would be death, death for this market is if somehow something came out that led people to believe that the fed funds rate has not topped out yet. If for some reason people thought the Fed was even giving an inkling to raising rates further, stand out of the way."  On the economic front, orders for long-lasting U.S. manufactured goods increased more than expected in February, while business spending on equipment showed tentative signs of recovery. In a separate report, the Conference Board said its consumer confidence index was little changed at 104.7 in March. 

The Dow Jones Industrial Average (.DJI), opens new tab fell 31.31 points, or 0.08%, to 39,282.33. The S&P 500 (.SPX), opens new tab lost 14.61 points, or 0.28%, at 5,203.58 and the Nasdaq Composite (.IXIC), opens new tab slid 68.77 points, or 0.42%, to 16,315.70.  The three major U.S. indexes hit record highs last week after the Fed maintained its projection for three interest-rate cuts this year.  Markets have been slowly increasing expectations the central bank will cut rates by at least 25 basis points in June, currently pricing in a 70.4% chance, the CME's FedWatch Tool, opens new tab showed, up from 59.2% last week.

Trump Media & Technology group jumped 16.1% to close at $57.99 after surging as high as $79.38 as it kicked off its first day of trading after completing a reverse merger with a blank check firm.  McCormick (MKC.N), opens new tab jumped 10.52% as the best performer on the S&P 500 after the spice maker beat market expectations for first-quarter sales and profit.  Seagate Technology (STX.O), opens new tab climbed 7.38% after Morgan Stanley upgraded the computer hard-drive maker's rating to "overweight" from "equal-weight."  United Parcel Service (UPS.N), opens new tab shares tumbled 8.16%, however, after announcing its 2026 forecast.

Declining issues outnumbered advancers by a 1.24-to-1 ratio on the NYSE. On the Nasdaq, declining issues outnumbered advancers by about a 1.34-to-1 ratio.  The S&P 500 posted 33 new 52-week highs and one new low while the Nasdaq recorded 122 new highs and 124 new lows.

Volume on U.S. exchanges was 10.43 billion shares, compared with the 12.23 billion average for the full session over the last 20 trading days.  Trading volumes are expected to be light throughout the week, thinning out further as the holiday approaches.