J.M. Smucker slid 5.3 per cent for one of the biggest declines among S&P 500 companies after the jelly and jam maker’s latest quarterly snapshot fell short of analysts’ estimates.
Among other stocks losing ground were doughnut shop chain Krispy Kreme, which fell 3.8 per cent, and Paramount Skydance, down 6.4 per cent.
Treasury yields were mostly lower in the bond market. The yield on the 10-year Treasury slipped to 4.25 per cent from 4.26 per cent late Tuesday.
Crude oil prices rose. European markets were mostly lower and Asian markets closed mixed overnight.
Trading on Wall Street is off to an uneven start this week following big gains last week on hopes for interest rate cuts from the Fed.
Markets have been subdued after Trump escalated his fight with the central bank by trying to fire Federal Reserve Governor Lisa Cook. Cook’s lawyer said she’ll sue Trump’s administration to try to stop him.
Trump has been feuding with the central bank over its cautious interest rate policy. The Fed has held rates steady since late 2024 over worries that Trump’s unpredictable tariff policies will reignite inflation. Trump has also threatened to fire Fed Chair Jerome Powell, often taunting him with name-calling. Still, he is only one of 12 votes that decides interest rate policy.
For now, the situation isn’t expected to have a major impact on the Fed’s near-term policy.
The two-year Treasury yield, which closely tracks expectations for Federal Reserve action, dropped to 3.62 per cent from 3.68 per cent.
Traders are still betting the Fed will trim its benchmark interest rate at its next meeting in September. Traders see an 90.3 per cent chance that the central bank will cut the rate by a quarter of a percentage point, according to data from CME Group.
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The Federal Reserve cut its benchmark interest rate in late 2024 after spending the last several years fighting rising inflation by raising rates. It managed to mostly tame inflation and avoided having those higher rates stall economic growth, thanks largely to strong consumer spending and a resilient job market.
The Fed hit the pause button heading into 2025 over concerns that higher tariffs imposed by Trump could reignite inflation. Lower interest rates make borrowing easier, helping to spur more investment and spending, but that could also potentially fuel inflation. However, concerns are deepening over the jobs market.
Economic data is relatively light this week until Friday, which will bring another update on inflation: the US personal consumption expenditures index. Economists expect it to show that inflation remained at about 2.6 per cent in July, compared with a year ago. Businesses have been warning investors and consumers about higher costs and prices because of tariffs.
Steep tariffs placed by the Trump administration on India over Russian oil purchases took effect Wednesday, bringing the combined tariffs imposed on the US ally to 50 per cent.
