Stocks End Lower as Yields Climb, Weak Manufacturing Data Weighs on Sentiment
U.S. stock markets closed in negative territory on Monday, pressured by rising Treasury yields and fresh economic data. Investors turned cautious ahead of next week’s Federal Reserve policy meeting, even as bets on an interest rate cut remained high.
The ISM said U.S. manufacturing shrank for the ninth straight month in November. The survey showed factories still facing weak new orders and higher input costs, with analysts blaming lingering tariff effects. This ongoing slump hurt market sentiment and contributed to the day’s decline.
Despite strong expectations for a Fed rate cut next week, U.S. Treasury bond yields moved higher. This increase followed a global trend, spurred by comments from the Bank of Japan's governor that hinted at a potential rate hike there. Bond yields move inversely to prices, and the climb put pressure on interest-rate-sensitive sectors of the stock market, such as real estate and utilities.
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The justices seemed focused on finding a middle path. They doubted Cox’s claim that simply knowing about piracy wasn’t enough for liability, suggesting the company’s lack of action was the real issue. Justice Sonia Sotomayor said Cox’s “laissez-faire attitude” likely influenced the jury. She used a blunt comparison, likening Cox to a gun seller who ignores a buyer openly admitting they plan to kill, asking why giving internet access to a known infringer was any different.
Markets are overwhelmingly pricing in a 25 basis-point interest rate cut at the Fed's December 10th meeting, with odds placed above 85%. However, the pre-meeting quiet period limited new signals. While Fed Chair Jerome Powell was scheduled to speak, he was not expected to comment on monetary policy so close to the decision. Investors are now looking ahead to key inflation data due later this week for further clues.
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Preliminary data showed broad-based declines. The Dow Jones Industrial Average fell the most, losing over 400 points. The S&P 500 and Nasdaq Composite also finished lower. In brighter news, shares of major retailers like Walmart and Target edged higher as Cyber Monday shopping kicked off. Additionally, software firm Synopsys surged after announcing a $2 billion investment from AI chip giant Nvidia.
