U.S. stocks fell on Tuesday after the Nasdaq Composite closed at a two-year low during the regular session as investors awaited key inflation data and the start of the earnings season.
The Dow Jones Industrial Average fell 87 points, or 0.30%, recovering from a slide that sent the index down as much as 200 points in premarket trade. The S&P 500 fell 0.93%, while the Nasdaq Composite fell 1.52%, as technology and semiconductor stocks slipped.
Stocks were lower on Monday with the Nasdaq composite falling 1% following a fall in semiconductor stocks. The Dow Jones industrial average was down nearly 94 points, or 0.3%, while the S&P 500 was down 0.8%.
Bond prices also fell. The yield on the US 10-year Treasury rose five basis points to 3.937% after nearing the key 4% level overnight. Bond yields are inversely proportional to prices and the basis point is one-hundredth of a percent.
The moves came as investors weighed comments from JPMorgan CEO Jamie Dimon, who warned the U.S. could fall into recession in the next “six to nine months” and said the S&P 500 could fall another 20% depending on the Federal Reserve. Soft or hard landing for engineers economy.
Those comments came at the start of a big week for third-quarter bank earnings, and ahead of Wednesday’s producer price report, Thursday’s consumer price index report for September and Friday’s retail sales numbers for last month.
Investors’ reaction is focused solely on how the Federal Reserve is working to reduce inflation.
“It’s a poor stock market environment, with a weak economy, uncertainty over earnings and how long central bank tightening will last, and sentimental issues with extremely risk-averse investor sentiment,” said David Banson, chief investment officer at The Banson. The group, in a Tuesday note.
“We believe the Fed will raise interest rates once or twice until the federal funds rate reaches 4%, then pause, at which point the Fed will assess the damage done,” he added.