Equites Declined as ISM Services Show Warning Signals – US Market Wrap

Equities wiped out gains after data showed diminishing US services amid sticky price pressures and increasing concern about the Fed’s policy challenges. Short-dated Treasuries underperformed. Oil declined as Russia was said to mull an air truce with Ukraine.

Following a rally that put S&P 500 on the edge of all-time highs, the benchmark lost steam. A closely observed gauge of chipmakers slid more than 1%. In late hours, AMD rose as its revenue forecast beat estimates before declining after its earnings. Super Micro Computer slipped after the maker of servers reported results that missed expectations.

A soft $58 bln sale of 3-yr notes kicked off a trio of US auctions this week. The yield on 10-Yr Treasuries hardly changed at 4.20%, while those on 2-Yr notes rose four basis points to 3.72%.

The US services sector stagnated as businesses – faced with tepid demand and rising costs – lowered headcount. Data out last week displayed weaker-than-expected jobs data while inflation-adjusted consumer spending barely increased.

Trump told CNBC that Treasury Secretary Bessent said he did not want to be nominated to replace Fed’s Powell as the next Fed chair. Trump also said that US tariffs on semiconductor and pharmaceutical imports would be declared “within the next week or so.”