US stocks slip as rising yields pressure some stocks

Wall Street’s main indexes edged lower on light trading volume on Thursday, as rising yields pressured some stocks, while investors awaited a year-end boost from the so-called Santa Claus rally.

Yields on government bonds rose across the board, with the yield on the benchmark 10-year note hitting 4.64%, the highest since early May.

Among megacap stocks, Amazon.com fell 0.3%, while Meta Platforms shed 0.6%.

Rate-sensitive real estate stocks were the most down 0.4%, while consumer discretionary fell 0.5%.

“Right now we’re at the inflection point on Treasury yields, especially the 10-year…any move higher and that causes weakness in equity markets and that’s what I’m seeing this morning,” said portfolio manager George Cipolloni. said portfolio manager George Cipolloni. at Penn Mutual Asset Management.

At 09:40 am, the Dow Jones Industrial Average was down 123.50 points, or 0.30%, at 43,173.53, the S&P 500 was down 15.13 points, or 0.25%, at 6,024.91 and the Nasdaq, down 46% points, or 0.25%, at 43,173.53. is 19,984.67 upto.

Markets in Europe, London and some parts of Asia remained closed on Thursday.

The S&P 500 and Nasdaq ended Tuesday’s truncated session with a third straight day of gains led by megacap and growth stocks.

Gains from Apple, Tesla, Alphabet, Amazon, Nvidia, Microsoft and the Meta platform have accounted for more than half of the S&P 500’s 28.4% total return this year, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Without the Magnificent Seven stocks, the benchmark index’s total return would have been 13.2% in 2024, Silverblatt added.

US stocks have had a speed bump this month following an election-led rally in November as they contend with the Federal Reserve’s forecast of lower interest rate cuts in 2025.

Three major indexes have hit multiple record highs this year on hopes of a low interest rate environment and the prospect of artificial intelligence boosting corporate profits. However, investors are starting to question the sustainability of the boom due to stretched valuations and megacaps continue to attract more investor funds.

Still, investors expect a generally strong finish in the final days of the year — a so-called “Santa Claus rally” — a pattern attributed to low liquidity, tax-loss harvesting and year-end bonus investments.

The S&P 500 has gained an average of 1.3% over the last five trading days of December and the first two days of January since 1969, according to Stock Trader’s Almanac. A December without a Santa rally has been a weaker-than-average year, data from LPL Financial dating back to 1950 shows.

Meanwhile, a Labor Department report showed that the number of new Americans filing for jobless benefits fell to 219,000 last week, compared with the 224,000 expected by economists in a Reuters poll.

Cryptocurrency-related stocks were down after Bitcoin fell more than 3%. Coinbase Global was down 1.4%, while Riot Platforms and Mara Holdings fell more than 2.4%.

Declining issues outnumbered advancers by a 3.08-to-1 ratio on the NYSE and by a 2.03-to-1 ratio on the Nasdaq.

The S&P 500 posted two new 52-week highs and one new low while the Nasdaq Composite hit 17 new highs and 24 new lows.