Wall Street Slumps Despite Strong U.S. Economic Data

Good news for the US economy once again proved to be bad news for Wall Street as the stock market slumped on Tuesday following unexpectedly positive reports on the job market and business activity, according to Stan Choe, Yuri Kageyama, and Matt Ott of the Associated Press (AP).

While the solid economic performance is positive for job seekers and may ease fears of a recession, it also raises concerns about persistent inflation.

The S&P 500 fell 1.1% after losing early gains.

The Dow Jones Industrial Average dropped 178 points, or 0.4%, while the Nasdaq composite tumbled 1.9%. Stocks faced downward pressure due to rising bond yields, which surged after the release of the economic reports.

One report showed US employers had more job openings at the end of November than economists predicted, while another highlighted stronger-than-expected growth in the finance, retail, and services sectors in December.

While the solid economic performance is positive for job seekers and may ease fears of a recession, it also raises concerns about persistent inflation.

The robust data could deter the Federal Reserve from cutting interest rates, a move that Wall Street favors. Additionally, the Institute for Supply Management’s report on services industries showed an acceleration in price increases, further fueling inflation worries.