Stock Market News Today: Markets are largely lower a day ahead of CPI (SP500)

U.S. stocks on Tuesday gave up their early gains to trade lower, weighed down by the financial sector ahead of key earnings reports later this week. Market participants also exhibited caution a day before the latest consumer inflation data.

Wall Street’s three major averages opened in the green but quickly reversed course after. The tech-heavy Nasdaq Composite (COMP:IND) fluctuated at the flatline, last down 0.06% to 16,244.62 points in afternoon trade, while the benchmark S&P 500 (SP500) was lower by 0.25% to 5,189.32 points. The blue-chip Dow (DJI) fell 0.35% to 38,757.18 points.

Of the 11 S&P sectors, six were in the red. Financials fell the most, ahead of quarterly numbers by heavyweight names JPMorgan (JPM), Wells Fargo (WFC) and Citi (C) on Friday.

Wednesday’s consumer price index (CPI) report will be closely watched by investors for further clues on the future of monetary policy. With CPI coming in hotter-than-anticipated the last two months, concerns over sticky inflation have weighed on sentiment. Moreover, stronger-than-expected cues on the labor market led to traders dialing back their expectations for interest rate cuts last week, which resulted in the S&P 500 (SP500) notching its worst weekly performance of the year.

Tuesday’s economic calendar was largely empty, though the one indicator on the docket turned out to be slightly significant. According to the National Federation of Independent Business, small business optimism in March hit its lowest levels since December 2012, with inflation once again being reported as the top business problem on Main Street.

“Price pressures and finding quality labor were the primary issues facing small businesses in March, although inflation has muscled its way back to being the foremost concern for most small businesses. Indeed, the net percentage of small business owners raising prices jumped to 28% from 21%, the highest share since October 2023,” Wells Fargo’s Sam Bullard said.

“Hiring remains a challenge for small businesses as the labor market has held firm in the face of higher interest rates. Small firms’ hiring intentions continued to pull back in March, a trend that we expect will continue as long as firms must contend with higher interest rates. The down-trend suggests the labor market may start to lose some momentum over the coming months,” Bullard added.

Turning to the fixed-income markets, Treasury yields were lower. Also in focus was a $58B 3-year note auction that tailed by 4 basis points. The longer-end 30-year (US30Y) and 10-year yields (US10Y) were both down 5 basis points each to 4.51% and 4.37%, respectively. The shorter-end more rate-sensitive 2-year yield (US2Y) was down 4 basis points to 4.75%.

See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.

Looking at active stocks, Moderna (MRNA) was the top percentage gainer on the S&P 500 (SP500). The vaccine maker released positive data from an early stage study assessing its investigational candidate plus Keytruda for the treatment of head and neck cancer.

Boeing (BA) slipped after the top planemaker revealed a 55% Y/Y fall in March aircraft deliveries amid a production cap and heavy regulatory scrutiny following early January’s blown door plug incident on an Alaska Airlines (ALK) flight.

Norfolk Southern (NSC) gained after the railroad operator reached a $600M settlement over a February 2023 freight train derailment in East Palestine, Ohio.