The S&P 500 fell 0.4% in afternoon trading and remains a bit below its all-time high set last week. The Dow Jones Industrial Average was down 271 points, or 0.6%, as of 1:53 p.m. Eastern time, and the Nasdaq composite was mostly unchanged.
Treasury yields eased a bit, following a larger initial drop, after one report said the U.S. unemployment rate was at its worst level last month since 2021, but employers also added more jobs than economists expected. A separate report, meanwhile, said an underlying measure of strength for revenue at U.S. retailers grew more in October than economists expected.
The mixed data initially sent Treasury yields lower in the bond market. The knee-jerk reaction seemed to be that the reports could encourage the Federal Reserve to see the slowing job market as the biggest threat to the economy, rather than high inflation, and cut interest rates further in 2026. But yields quickly recovered and then drifted up and down.
What the Fed does with interest rates is a top driver for Wall Street because lower rates can give a boost to the economy and to prices for investments, even if they also may worsen inflation. A report coming on Thursday will show how bad inflation was last month, and economists expect it to show prices for U.S. consumers continue to rise faster than anyone would like.
A report released on Tuesday after U.S. stocks began trading suggested price pressures are rising sharply, with average selling prices for businesses climbing at one of the fastest rates since the middle of 2022. The preliminary data from S&P Global also said growth for overall business activity slowed to its weakest level since June.
“Higher prices are again being widely blamed on tariffs, with an initial impact on manufacturing now increasingly spilling over to services to broaden the affordability problem,” according to Chris Williamson, chief business economist at S&P Global Market Intelligence.
