Market reaction to inflation data
The Dow Jones Industrial Average fell 1.2%, while the S&P 500 dropped 1.5% and the Nasdaq Composite lost 2.1%. The declines came as the 10-year Treasury yield climbed to 4.65%, its highest level in six months. Market participants pointed to stronger-than-expected economic data and comments from Federal Reserve officials suggesting interest rates may remain elevated for longer than previously anticipated.
Technology sector under pressure
Technology stocks experienced significant selling pressure, with the Philadelphia Semiconductor Index falling 3.2%. Investors expressed concern about stretched valuations in artificial intelligence-related companies. Nvidia, which reports earnings this week, saw its shares decline ahead of what options markets suggest could be a 50 billion price swing based on results. Software stocks attempted a modest rebound but struggled to maintain momentum.
Corporate earnings mixed
Home Depot beat quarterly sales estimates but flagged choppy demand for large remodeling projects as housing affordability remains a challenge. Walmart reported strong results, citing success with online expansion and loyalty programs during a year of tariff uncertainty. The mixed corporate results reflect ongoing economic uncertainty as consumers balance spending between necessities and discretionary purchases.