Wall Street is experiencing a slight decline as concerns grow that the Federal Reserve may not begin cutting interest rates until later in the year. Futures for both the S&P 500 and the Dow Jones Industrial Average fell more than 0.1% before markets opened on Monday. This dip is causing Treasury yields to reach one-month highs, with shares sliding and investors becoming increasingly wary of how delayed interest rate cuts could impact the economy. Despite the majority of stocks falling due to concerns over the economy running too hot, Big Tech companies continue to propel Wall Street to record highs. However, the increase in bond yields after a report showing that U.S. employers hired more workers than economists expected is leading to added pressure on inflation and an extended wait before the Fed begins cutting interest rates.
At the start of the week, Wall Street experienced a slight decline as concerns mounted over the possibility of the Federal Reserve not reducing interest rates until later in the year. Expectations for sweeping interest rate cuts began to extend from May to June as traders show wariness over how delayed cuts might affect the economy. Big Tech companies continue to drive Wall Street to new highs, but renewed economic concerns have started to put pressure on stock prices. The higher yields in the bond market due to a report showing more workers being hired than expected has caused added concerns about inflation and potential extended waits before interest rates are cut. Shares also slipped due to higher bond yields in the bond market, adding to worries about the economy being too hot and the possible Federal Reserve reaction to it.
Chinese shares led the decline in Asia even after Beijing market regulators promised to crack down on abuses and protect small investors. While China’s measures to reassure investors have so far been ineffective, comments by former President Donald Trump suggesting a potential 60% tariff on imports of Chinese goods if re-elected have added pressure to market sentiment. The market’s performance in China has been shaky of late, with last week being the country’s worst in the last five years for stock declines, and this instability has further pressured global markets.