US stocks fell as strong retail sales darkened expectations for rapid Federal Reserve interest rate cuts

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  • US stocks fell on Wednesday as investors reevaluated their view on federal interest rate cuts in 2024.

  • Retail sales came in hotter than expected in December, putting pressure on the Federal Reserve to maintain its tight policy.

  • Bond yields rose as investors raised their interest rate expectations.

US stocks fell on Wednesday after hot economic data dampened investors’ hopes that the Federal Reserve would cut interest rates soon.

Retail sales came in higher than expected in December, rising 5.6% year over year. This is a sign that American consumers are more than that Keeping up with the pace of inflation – Pressure on the Fed to keep interest rates higher for longer as central bankers look to cool the economy.

Markets now expect the Fed to cut interest rates by 57.6% at its March policy meeting, down from 63% on Tuesday, according to the CME FedWatch tool.

However, some investors are still looking forward to significant interest rate cuts this year. Markets see there is a 39% chance that the Fed will cut interest rates by 150 basis points in 2024, about double what central bankers expected.

Here’s where US indices stand shortly after the opening bell at 9:30 a.m. on Wednesday:

Here’s what else happens:

In commodities, bonds and cryptocurrencies:

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