Stock market today: US stocks drop after hot economic data dents Fed rate-cut prospects

  • U.S. stocks traded mostly lower on Monday following the release of strong economic data.
  • The ISM manufacturing index rose to 50.3 in March, marking the first monthly expansion since 2022.
  • The data poured cold water on hopes for interest rate cuts in June.

Stocks fell and bond yields soared on Monday after strong economic data poured cold water on hopes of a June interest rate cut by the Federal Reserve.

Manufacturing activity as measured by the ISM index jumped to 50.3 in March, well above expectations. The data represented the manufacturing sector's first monthly expansion since 2022. Component prices also soared in the ISM report, raising concerns about persistent inflation.

If inflation accelerates again, the Federal Reserve would likely err on the side of caution and postpone planned interest rate cuts. The likelihood of a Fed rate cut in June fell below 50% immediately after the ISM report, according to Bloomberg data.

Prospects for a June interest rate cut were initially higher on Monday As investors reacted to Friday's release of PCE inflation data, which was in line with expectations.

Here's where the US indices were at the 4pm close on Monday:

This is what happened today:

In commodities, bonds and cryptocurrencies:

  • West Texas Intermediate Crude oil rose 0.94% to $83.95 a barrel. Brent Crudethe international benchmark index, jumped 0.70% to $87.61 a barrel.
  • Gold jumped 1.05% to $2,261.90 an ounce.
  • The 10-year Treasury yield rose 12 basis points to 4.33%.
  • bitcoin fell 2.70% to $69,390.
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