U.S. stock indexes edged lower as Walmart's profit miss and rising Treasury yields pressured markets, pushing the S&P 500 toward a fifth straight modest loss. The Dow was down about 195 points and the Nasdaq slipped 0.4% by midday. Walmart fell 4.3% after reporting a spring profit below analysts' expectations, while Nvidia and other big tech stocks were steadier after recent swings. S&P Global's preliminary data showed accelerating U.S. business activity and the fastest rise in average selling prices in three years, partly due to tariffs, which is a discouraging sign for inflation. Those readings make near-term Fed rate cuts less likely despite market bets on easing in September and attention on Fed Chair Jerome Powell's Jackson Hole remarks.
The moves were stronger in the bond market, where Treasury yields rose after a report forced Wall Street to scale back hopes that the Federal Reserve may soon deliver relief by cutting interest rates. The report suggested growth in U.S. business activity is accelerating and hit its fastest rate so far this year. That's good news for the economy, but the preliminary data from S&P Global also said tariffs helped push up average selling prices at the fastest rate in three years. That's a discouraging sign for inflation.
Taken all together, such data has historically aligned more with the Federal Reserve considering a hike in interest rates, rather than a cut, according to Chris Williamson, chief business economist at S&P Global Market Intelligence. No one expects a rate hike to happen soon, but the overwhelming expectation on Wall Street has been for coming cuts. Traders are betting on a nearly 72% chance that the Fed will lower its main interest rate at its next meeting in September, according to data from CME Group.
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