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Key Takeaways
- The S&P 500 fell 0.6% on Wednesday, Jan. 17, 2024, as higher-than-expected December retail sales data raised doubts about potential interest rate cuts in coming months.
- Shares of Albemarle tumbled after the lithium producer announced layoffs and other cost-cutting measures amid waning EV demand.
- Concerns that the Fed could postpone its rate-cutting cycle pressured rate-sensitive sectors, particularly real estate.
U.S. equities indexes fell as data from the U.S. Census Bureau showed retail sales grew 0.6% month over month in December, ahead of expectations. The resilience in consumer spending raised doubts about whether the Federal Reserve will be able to cut interest rates this spring.
The S&P 500 closed 0.6% lower, while the Nasdaq and the Dow declined 0.6% and 0.3%, respectively. Wednesday’s declines marked the second straight day of losses to start the holiday-shortened trading week.
Shares of Albemarle ( ALB ) fell 4.2%, marking the steepest losses on the S&P 500, after the lithium miner announced that it would lay off workers and institute other cost-cutting measures. The company is aiming to optimize its cost structure as declining demand for electric vehicles (EVs) and lower lithium prices have cut into its profits.
Concerns that the Fed could delay the onset of its rate-cutting cycle had an impact on rate-sensitive sectors, particularly real estate. Shares of Boston Properties ( BXP ), a real estate investment trust (REIT) that develops premium workplace properties, dropped 3.7%.
Wynn Resorts ( WYNN ) shares tumbled 3.6% on Wednesday after UBS analysts lowered their price target on the stock to $108. News emerged last week that several insiders, including the CEO and CFO, had unloaded shares of the casino operator.
Johnson Controls International ( JCI ) stock was Wednesday’s top performer on the S&P 500, gaining 3.5%. The advance marked a partial recovery from the steep losses experienced Tuesday when the building products and equipment firm announced the appointment of a new CFO.
In a volatile day of trading, shares of PayPal ( PYPL ) shook off a downgrade by Mizuho and concerns about market share among younger consumers to close the session 2.5% higher. The intra-day turnaround came as PayPal’s CEO spoke with CNBC about the need for innovation and leveraging artificial intelligence (AI) to boost the payment provider’s bottom line.
The growing uncertainty surrounding rate cuts helped boost some stocks traditionally seen as safer plays, including shares of food producers. J.M. Smucker ( SJM ) shares advanced 2.0%, while shares of Campbell Soup ( CPB ) added 1.3%.