Wall Street falls, Tesla tumbles; ASX set to retreat

After briefly shading some bets toward just two rate cuts this year, traders are still largely expecting three cuts in 2024, according to data from CME Group. That follows report on Tuesday that showed US employers were advertising roughly the same number of job openings in February as they were a month earlier and a stronger-than-expected gain in factory orders.

With the US economy remaining stronger than expected, the chances are rising for just two rate cuts this year. That has Gargi Chadhuri, chief investment and portfolio strategist, Americas, at BlackRock, suggesting investors keep their bets spread across a wide range of investments, rather than “trying to time the market – or the Fed.”

In the bond market, the yield on the 10-year Treasury rose to 4.36 per cent from 4.33 per cent late Monday.

The two-year yield, which moves more closely with expectations for Fed action, slipped to 4.69 per cent from 4.71 per cent late Monday.

High rates slow the economy by design, by making borrowing more expensive. They also hurt prices for investments by making it more attractive for investors to put money instead in safer alternatives. Bitcoin tumbled 6.3 per cent.

Beyond worries about interest rates staying high, critics also say the US stock market has simply gotten too expensive after soaring more than 20 per cent in six months. Companies will likely need to deliver strong growth in profits to justify such big moves.

On Wall Street, several health care stocks led the market lower as worries rose about their upcoming profits. Analysts at Citi Research said the final Medicare Advantage rate approved by the government was well below expectations given higher-trending medical costs and a big lobbying push for the industry.

UnitedHealth Group fell 7.8 per cent, and CVS Health lost 8.1 per cent.

PVH, the company behind Calvin Klein and Tommy Hilfiger, lost more than a fifth of its value despite reporting stronger profit for the latest quarter than analysts expected. Its forecast for profit this upcoming year fell short of analysts’ estimates, in part due to weakness in Europe, and its stock dropped 23.5 per cent.

Among the few gainers on Wall Street were stocks of oil and gas producers. Exxon Mobil rose 1.4 per cent and Marathon Petroleum rose 1.9 per cent.

They followed the price of crude higher. A barrel of benchmark US oil rose 1.4 per cent to $US84.88 and is back to where it was in October. A barrel of Brent crude, the international standard, climbed 1.4 per cent to $US88.63.

In Europe, stocks were falling 0.9 per cent in Paris. Germany’s DAX lost 1.1 per cent, and London’s FTSE 100 was 0.2 per cent lower.

In Asia, indexes were mixed. Hong Kong’s Hang Seng jumped 2.4 per cent, but moves were much more modest elsewhere.