NEW YORK (AP) — Wall Street is sagging again Tuesday as a big rally that had sent it to a 20-month high loses steam.
The S&P 500 was 0.4% lower in early trading and on track for its first back-to-back drop since October. The Dow Jones Industrial Average was down 131 points, or 0.4%, as of 9:40 a.m. Eastern time, and the Nasdaq composite was 0.3% lower.
Stocks were down even more sharply in Asia amid worries about the health of China’s economy, the world’s second largest. On Wall Street, KeyCorp slumped 2.5% for one of the larger losses after it cut its forecast for income from fees and other non-interest income.
December’s loss of momentum comes after stocks charged higher through November on hopes the Federal Reserve may finally be done with its market-shaking hikes to interest rates. Inflation has come down since its peak two summers ago, and the hope is that means the Fed can soon turn to cutting interest rates, which could help keep the economy out of a recession and juice prices for all kinds of investments.
More data will arrive later in the morning that could influence the Fed, whose next move on interest rates is due a week from Wednesday.
One report will show how many job openings employers are advertising, while another will show how strong U.S. services industries are.
A spate of recent data has inflated hopes on Wall Street that the economy is slowing from its recently hot pace by just the right amount. Too much strength would give inflation more fuel, but too little would mean a recession.
That’s why investors are hoping to see a slowdown in the job-openings data in particular. The hope is that the job market can cool more through employers cutting back on open positions than on employers laying off lots of workers. Economists expect the report to show that employers advertised 9.3 million openings at the end of October, down from 9.6 million a month earlier.
In the bond market, Treasury yields continued to sag further from the heights they reached during late October.
The yield on the 10-year Treasury fell to 4.20% from 4.26% late Monday, offering some more breathing space for stocks and other markets. It had been above 5% and at its highest level in more than a decade during October.
Lower yields have been one reason prices for cryptocurrencies have been rising recently. Excitement about a possible exchange-traded fund tied to bitcoin, which would open it to new kinds of investors, has also helped send it above $42,000 recently.
The surge of interest helped Robinhood Markets report a roughly 75% jump in trading volumes for crypto during November from a month earlier. It also said customers added about $1.4 billion in net deposits during the month, and its own stock rose 4.3%.
On the losing end was Take-Two Interactive, which slipped 0.6% after a trailer for its highly anticipated Grand Theft Auto VI video game said it’s coming in 2025. That was later than some analysts expected.
In markets abroad, stocks sank 1.9% in Hong Kong and 1.7% in Shanghai after the Moody’s credit-rating agency said it may downgrade China’s rating. Its economic growth is slowing and facing mounting troubles from its real-estate industry.
Stocks also fell in Japan and South Korea but were mixed across Europe.