Stock Market Today: Dow lower as Treasury yields rise after retail sales surprise
Investing.com — The Dow ended lower Tuesday, as an ongoing stumble in China's economy raised fears about global growth just as Treasury yields after stronger-than-expected consumer spending dented hopes that the Federal Reserve won't resume rate hikes later this year.
The Dow Jones Industrial Average fell 1%, or 361 points, Nasdaq fell 1.1%, and the S&P 500 fell 1% lower.
Retail sales rose 0.7% last month, well above expectations for 0.4%, marking the biggest increase since January.
The data pointing to signs of consumer strength cooled bets the Fed may not have to resume rate hikes later this year, and further pushed out expectations for rate cuts.
Bets on a Fed November rate hike rose to 32.2% from 26.4% last week, according to the CME FedWatch Tool.
But some on Wall Street expect the consumer to tap out sooner rather than later.
“We expect retail sales to weaken through the end of the year is expected as availability of credit weighs on economic activity and the labor market,” Morgan Stanley said in a note.
The 10-year Treasury yield jumped to end the day at their highest level since October amid easing bets of less hawkish Fed action.
Fitch Ratings analyst Chris Wolfe told CNBC on Tuesday that the credit ratings agency may forced to downgrade a slew of U.S. banks including JPMorgan (NYSE:JPM) should the health of the banking sector deteriorate further.
Another downgrade of the U.S. banking industry to A+ from AA-, would force it to reassess its ratings on each of the more than 70 U.S. banks it covers, Wolfe told CNBC.
Regional banks including Citizens Financial Group Inc (NYSE:CFG), KeyCorp (NYSE:KEY), and M&T Bank Corp (NYSE:MTB) led the selling in the sector, but major Wall Street banking including JPM and
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