Dow falls nearly 300 points, S&P retreats from record as rates spike, McDonald’s slides: Live updates


Traders work the floor during morning trading at the New York Stock exchange (NYSE) ahead of the US Federal Reserve’s decision on lending rates, in New York on January 31, 2024.

Angela Weiss | Afp | Getty Images

Stocks fell Monday as Treasury yields spiked higher on concerns that the Federal Reserve may not cut rates as much as expected. Lackluster results from McDonald’s also dampened investor sentiment.

The Dow Jones Industrial Average dropped 234 points, or 0.6%. The S&P 500 slipped 0.3%, while the Nasdaq Composite edged down 0.2%. Monday’s action comes after the S&P 500 reached a record high last week, powered by sharp moves higher in Big Tech.

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S&P 500’s 2024 performance

The yield on the 10-year Treasury note was last up more than 13 basis points to 4.168% as investors assessed a fresh batch of strong economic data that suggested rates may stay elevated for longer than anticipated. The benchmark yield traded around 3.81% last week.

“It’s a recalibration of expectations around how soon the Fed will pivot,” said Keith Lerner, Truist’s co-chief investment officer. “The pivot trade is being unwound to a certain extent. The tension between a strong economy and what that means for the Fed is likely to continue to create these kind of reset days.”

Fed Chair Jerome Powell on Sunday reiterated comments made after last week’s January policy meeting, suggesting that a rate cut in March was unlikely. Expectations for cuts have eased since the remarks, with the probability of a cut next month last at 14.5%, according to CME Group’s FedWatch Tool.

Earnings season stretched on, with McDonald’s slipping 3.8% after posting a mixed quarter. The results heightened concerns about earnings from companies outside of the technology behemoths and whether they can deliver the rest of the season.

Elsewhere, Boeing slumped nearly 2% on more 737 Max woes. Tesla also dragged the broader market, losing more than 3% as worries over rising competition and persistent pricing pressures for the EV giant lingered.


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