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Stock Market Today: Dow ends lower as rising bond yields, McDonald's slump bite

Published 02/04/2024, 07:18 PM
Updated 02/05/2024, 04:26 PM
© Reuters.

Investing.com -- The Dow closed lower Monday, pressured by a McDonald's-driven wobble in consumer stocks and jump in Treasury yields after Chairman Jerome Powell shackled hopes of a sooner interest rate cut. 

By 16:00 ET (21:00 GMT), the Dow Jones Industrial Average slipped 274 points or 0.7%, the S&P 500 fell 0.3%, the tech-heavy Nasdaq Composite fell 0.2%.

Treasury yields rise after Powell signals patience on cuts

In an interview Sunday with CBS' "60 Minutes" that aired on Sunday. Powell told the news program that the resilient U.S. economy can give Fed officials more time to take a "prudent" approach to possible benchmark interest rate reductions. 

Powell added that he would like to "see the data confirm" that inflation -- the major focus of an aggressive series of Fed policy tightening that has pushed borrowing costs up to more than two-decade highs -- is cooling back down to the central bank's stated 2% in a "sustainable way."

The cautious view on rate cuts, pushed Treasury yields higher as bets on rate cuts were reined in, with traders now pricing just a 16% cut in March, well below the 80% peak seen earlier this year, and now see just five cuts for this year compared with six previously. 

The rate-sensitive United States 2-Year yield and the benchmark 10-year yield, which typically move inversely to prices, were higher following Powell's comments.  

McDonald's slumps after Q4 sales miss to pressure consumer stocks lower 

McDonald’s (NYSE:MCD) fell more than 3% reported fourth-quarter comparable sales growth of 3.4%, missing Bloomberg consensus estimates of 4.79%, as the burger chain's international operations were dented by boycotts relating to the violence in the Middle East.

The impact of boycotts are expected to continue as long as the war rages, the company warned, following a "meaningful" impact in Q4.  

As well as a slump in McDonald's, an ongoing selloff in Tesla (NASDAQ:TSLA), and weakness in cruise stocks including Carnival Corporation (NYSE:CCL) added further pressure on consumer stocks, which were one of the worst performing sectors on the day.

Nvidia (NASDAQ:NVDA) in fresh record high after Goldman Sachs backing; Caterpillar shines; Boeing slips on potential delays

Nvidia closed at a fresh record high after Goldman Sachs lifted its price target on the chipmaker to $800 from $625, suggesting 16% upside from current levels, amid optimism that surge in spending on generative artificial intelligence will support continue to underpin demand for Nvidia's artificial-intelligence

Goldman Sachs, citing fresh industry data, said it no longer expects a slowdown in data center spending amid a "robust" Gen-AI demand. 

Caterpillar (NYSE:CAT), the machinery manufacturer that is often viewed as a bellwether for the American industrial sector, rose more nearly 2% after posting fourth-quarter adjusted per-share profit that topped expectations, as higher prices helped offset a dip in sales volume. Shares in Caterpillar rose sharply in early U.S. dealmaking.

Boeing (NYSE:BA) fell more than 1% after the embattled planemaker warned that a fresh issue in some fuselages of its 737 jets could lead to the "near-term" delivery delays. 

Scrutiny over the safety of Boeing jets has been rising since a dangerous mid-air door plug breach on one of its 737 Max 9 planes operated by Alaska Airlines last month. In the wake of the incident, Boeing has not offered a forecast for its 2024 financial year, stating that it still has "much to prove" to win back the confidence of regulators and passengers.

Corporate Earnings Parade to Continue

Media firms will also be in focus in the coming days, with results ahead from the industry leaders like Walt Disney (NYSE:DIS), Fox, and Warner Music Group.

Chinese e-commerce player Alibaba (NYSE:BABA), ride-sharing firm Uber (NYSE:UBER), and chip designer Arm Holdings (NASDAQ:ARM) are slated to report this week.

(Scott Kanowsky, Oliver Gray contributed to this report.)

Latest comments

Macdonalds - i just dont understand why people spend money on feeding themselves with poison
And its not even pleasant poison: sloppily made, orders almost always in error, surly people. Just yuck.
So all these big tech companies are firing tens of thousands of employees and going into "AI" (aka language models) because they think that language models are somehow going to make them trillions in profits?
what?
Step 1, use language models ("AI") to type things for you. Step 2, fire all your employees. Step 3, ???? Step 4, profit
Don't worry, I am sure all the tens of thousands of people the big tech companies are laying off (in just the past month alone) while having trillions of people's retirement funds being moved into their hyper-valuated stocks is not going to come back to harm the economy. I bet all these unemployed people are going to sit around at home and make up for it by talking to chat GPT all day.
The rise of e-commerce is transforming retail markets.
McDonald's should just create an AI burger and triple the stock.
Brilliant idea!
Better idea is an AI nutritionist/personal assistant that knows your eating preferences/lifestyle/medical history, and order grocery/takeouts and make restaurant reservations for you accordingly.
One day last month I bought a package of 200 coffee filters at the big box store.  The next morning I got an e-mail from it's warehouse affiliated store telling my to buy their package of 700 coffee filters. Artificial un-intelligence at work.
NVDA made $18 billion in net profits, and has gained over $1 trillion in market cap. NVDA has gained so much in valuation that it would take nearly 100 years of profits to justify the gain in valuation over the past year.
NVDA is like TSLA, remember everybody was all hyped about TSLA and the stock price shot up thousands of percent. Everybody said EV's are the future and everybody will have one and everybody will be driving an EV by 2025. The other car companies started pumping who got into EVs. Then everybody found out it was a scam. Just saying "EV" does not instantly make it profitable. Same thing they are doing now with AI stocks. The people who are telling you to buy the hype/euphoria were in long ago. You are taking their bags.
"Tech Layoffs Surge in 2024: Over 32,000 Jobs Cut Amid AI Focus". When the AI bubble pops, the economy is going to be a complete disaster.
It's nice to see good job numbers balance out all the financial struggles every day Americans are facing, even though I cannot afford food and rent it is nice to see that I am helping the jobs numbers by having 3 jobs! Too bad I cannot afford to own a car to get to any of them
Nothing to see here folks...Just another in a string of miracles in the BIGGEST INVESTMENT JOKE IN THE WORLD.
more ignorant complaints from Mitch...
markets never stay down. But when they go up it's like a rocket non stop to the moon!!
Make your fast cash, but don't drink the kool-aid. These patterns are setting up for a significant sell-off.
"elevator down, stairs up"
Headlines this morning: "Market red as poor earnings and bearish Fed comments shake markets". Headlines now: "Market goes green as market digests wave of bad news"
Algos are allowing the dips to fall further and further. Tempering traders not to panic. The rebound always happens. A big drop is coming soon. Just the way it works. The DOW will lose a thousand points in one session. NASDAQ $600.
1k for Dow ain't much
  Down 2.6% "in one session" is sizable, and can be a good buying opportunity.
The methodical removal of losses commenced with the 11AM breaker fire, and per the script, losses magically vanish from the system.  Only in the BIGGEST INVESTMENT JOKE IN THE WORLD, as it financially defiles America in broad daylight.
mitch gets paid by the ignorant complaint...whose your payday Daddy Mitch..
who cares what Mitch writes on here, surely no one is swayed by his writings.
let's hope so don. but unfortunately his ignorance is shared by a lot of the readers on this site.
Down in the morning...and all losses evaporated by end of day. Rinse and repeat regardless of fundamentals and TA!. These are contrived and controlled markets down to every nickel and dime. Who cares about integrity, responsibility and values when you're making money ...right! Loathsome turds!
Generating capital gains. Tax dollars!
NVDA's last reported net income was $18 billion, today alone NVDA has added around $100 billion of market cap in 1 trading day and has a total valuation of nearly $1.5 trillion. It would take a century of previous reported income to justify current valuation.
Yes, "emerging technology", a company that has already gained over $1 trillion in market cap over the past 12 months, has a massively bloated P/E, has many direct competitors emerging, and is already been pumped by every mainstream financial company and retail investor. NVDA is already up over 20,000% over the past several years. You are not getting anything "emerging" you are taking bags from the people who bought years ago and are selling the snake oil to you now.
Goldman sees 20% upside in NIVDIA. I see 750 as easily reached and may be our time to sell for next retractment.
very nice NIVDIA. Thoughts and prayers for Dylan to gather understanding of emerging technology. but gop supports have never understood science or math.
NVDA just casually adding $100 billion more to its market cap for no reason. This AI market bubble is going to pop harder than the 1999 internet bubble.
The oil and gas industry turns out to be downright pure in comparison!
Social media is up on child exploitation. Services are up on illegal immigration spending. Economic decay.
Amazing that Nancy Pelosi's stock is the only one managing to go green today. NVDA is up over 40% over the past month and has added over $1 trillion market cap over the past year and they are still pumping the P/E of this stock even when the rest of the market is dumping. Interesting note, the information that sparked the move up earlier this month was related to a contract with China that would have had to be reviewed by the Federal government before approval...
Rate cut hopes being replaced with Mid East ceasefire hopes.
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