NEW YORK (AP) — Most U.S. stocks slipped Monday after a surprisingly strong report on U.S. manufacturing cast doubts on how much interest rates can ease this year.
The S&P 500 dipped 10.58 points, or 0.2%, from its all-time high to finish at 5,243.77. The Dow Jones Industrial Average dropped 240.52 points, or 0.6%, from its record to 39,566.85. The Nasdaq composite was an outlier and added 17.37, or 0.1%, to 16,396.83.
FedEx fell 3.3% after it said it did not extend its contract with the U.S. Postal Service to deliver air cargo domestically, which will end Sept. 29. Donald Trump’s social media company, Trump Media & Technology Group, lost more than a fifth of its value in another frenetic day of trading. The company, whose main business is the Truth Social platform, said that it lost $58.2 million last year on just $4.1 million in revenue. Its stock tumbled 21.5%.
Universal Health Services sank 4% for one of the S&P 500’s larger losses. It said a jury in Illinois awarded $535 million in damages to a patient who alleged negligence in a sexual-assault case involving another patient. The company said it has insurance to cover some of the amount, but the case’s final resolution may end up having a material effect on its financials.
Helping to keep the losses in check was Newmont. The miner's stock rose 1.6% as the price of gold continues to set records.
In the bond market, Treasury yields spurted higher after a report said U.S. manufacturing unexpectedly returned to growth last month. It snapped a 16-month run of contraction, according to the Institute for Supply Management.
It's the latest evidence showing the U.S. economy remains strong despite high interest rates. That's a positive for the stock market because it can drive growth in profits for companies. But it can also keep upward pressure on inflation. That in turn could mean a more hesitant Federal Reserve when it comes to the cuts to interest rates that investors crave.
Following the manufacturing data, traders on Wall Street briefly trimmed bets on the first cut to rates coming as soon as June. That's still a “reasonable baseline" expectation, according to Deutsche Bank economists, but they say tough talk from Fed officials recently could hint at interest rates staying higher for longer than earlier thought.
The Fed has hiked its main rate to the highest level since 2001 in order to slow the economy and hurt investment prices enough to get inflation under control. Expectations for coming cuts have been a major reason the S&P 500 soared more than 20% from October through March.