Index Rally Hits a Wall Ahead of US CPI – US Market Wrap

Stocks fell following a rally that put the market on track for its best year since 2019, as traders awaited key inflation data that will help shape the Federal Reserve’s interest rate outlook.

The S&P 500 fell from nearly overbought technical levels after a string of all-time highs. Nvidia’s stock fell as China launched an investigation into allegations that the giant US chipmaker violated anti-monopoly laws in connection with a 2020 deal. Meanwhile, Chinese stocks listed in the United States rose sharply as Beijing’s top leaders used their most direct language yet to promise monetary easing and boost domestic consumption.

Data, including Wednesday’s consumer price index, will provide Fed officials with a final assessment of the pricing environment before their meeting the following week. Any indication that progress on the inflation front has stalled could significantly reduce the chances of a third consecutive rate cut.

The S&P 500 dropped 0.6%. The Nasdaq 100 declined 0.8%. The Dow Jones Industrial Average declined 0.5%.

Treasury 10-year yields increased four basis points to 4.20%. The Bloomberg Dollar Spot Index gained 0.1%.

Oil prices rose as China signaled bolder stimulus for next year, while traders also kept an eye on Middle Eastern developments.