Wall Street stocks fall as markets weigh strong wage data, Fed meeting

It was big shot straight down on all the indexes, the Dow taking a whopping 570 point loss, the Nasdaq also in a 3-digit dump, on news that wages had increased more than expected – 1.2% in Q1. This combined with consumer confidence sinking to its lowest level in 1-1/2 years left the market defeated with worsening inflation and little hope of rate cuts. Today the forecast for cuts this year was lowered to 31 bps down from 150 in January. 

It’s an environment of knee-jerk reaction to the slightest warming data translating to an ever more hawkish Fed. But there was an optimist in the crowd: “Nothing has changed, growth is strong, labor is holding up and ultimately we’re taking a little bit of a breather.” More than half of the S&P has reported Q1 with 79.2% beating estimates vs the long-term average of 67%, a whopping difference. Volume came in at 11.5 billion. 

Wall Street stocks fall as markets weigh strong wage data, Fed meeting

By Chibuike Oguh

Tue April 30, 2024 5:21 PM

DJ: 38,386.09  +146.43      NAS: 15,983.08  +55.18        S&P: 5,116.17  +16.21     4/29

DJ: 37,815.92  -570.17       NAS: 15,657.82  -325.26       S&P: 5,035.69  -80.48      4/30

NEW YORK, April 30 (Reuters) - U.S. stocks ended lower on Tuesday as markets weighed economic data showing rising labor costs and deteriorating consumer confidence on the day of a key Federal Reserve policy meeting to decide the direction of interest rates.  Data showed on Tuesday that U.S. labor costs rose by a more-than-expected 1.2% last quarter, indicating an uptick in wage pressures. A survey also found that U.S. consumer confidence worsened in April, dropping to its lowest level in more than 1-1/2 years.  The reports came a day before the Federal Reserve Open Market Committee (FOMC) ends its two-day meeting, with investors widely expecting the central bank to leave interest rates unchanged.

Most Magnificent Seven stocks finished lower, including Tesla (TSLA.O), opens new tab, Alphabet (GOOGL.O), opens new tab, Nvidia (NVDA.O), opens new tab, Microsoft (MSFT.O), opens new tab, and Amazon (AMZN.O), opens new tab.  "We're still in an environment where the knee-jerk reaction is to extrapolate any warmer data into firmer inflation and more hawkish reaction from the Fed," said Garrett Melson, portfolio strategist at Natixis Investment Managers in Boston.  "But nothing has changed: growth is still strong, labor markets are holding up, and ultimately we're taking a little bit of breather in the disinflation process," Melson added.  Money markets are pricing in just about 31 basis points (bps) of rate cuts this year, down from about 150 bps estimated at the start of 2024, according to LSEG data.

S&P 500 (.SPX), opens new tab lost 80.48 points to end at 5,035.69 points, while the Nasdaq Composite (.IXIC), opens new tab lost 325.26 points to 15,657.82. The Dow Jones Industrial Average (.DJI), opens new tab fell 570.17 points to 37,815.92.

Shares of GE HealthCare(GEHC.O), opens new tab shrank after its first-quarter revenue missed analyst estimates, 3M (MMM.N), opens new tab gained after posting a better-than-expected quarterly profit.  Drugmaker Eli Lilly (LLY.N), opens new tab jumped after it raised its full-year profit forecast. PayPal (PYPL.O), opens new tab rose after raising its full-year adjusted profit forecast.

Of the 265 companies in the S&P 500 that have reported earnings to date for the first quarter, 79.2% have beat analyst estimates, compared with the long-term average of 67%, according to LSEG I/B/E/S data. 

Per the CBOE, volume came in at 11.5 billion.