Wall St falls as investors assess more data, earnings; Fed meet in focus

By Amruta Khandekar and Shashwat Chauhan

(Reuters) – Wall Street’s main stock indexes dipped in choppy trading on Tuesday in the run-up to the Federal Reserve’s monetary policy meeting, while investors assessed the latest batch of earnings reports and parsed through more economic data.

Nvidia was a big drag, down 3.7% after a report said U.S. curbs could force the chip designer to cancel billions of dollars of orders to China.

Other major growth stocks such as Meta Platforms and Microsoft fell between 0.4% and 1%.

Six of the 11 major S&P 500 sectors were trading lower, with information technology leading losses.

On the earnings front, heavy-machinery maker Caterpillar fell 6.3% as the company’s dealer inventories rose and a large order backlog shrank, indicating that equipment demand is starting to slow. Drugmaker Amgen slipped 4.3% after reporting third-quarter results.

Pfizer’s shares fell 1.5% after the drugmaker reported its first quarterly loss since 2019.

An October reading of Chicago PMI came in at 44 against expectations of 45, while a separate reading showed U.S. labor costs increased solidly in the third quarter.

“The slightly stronger increase in the employment cost index in the third quarter is another sign that the earlier rapid easing in labour market conditions may be fading,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

“But the forward-looking evidence still suggests wage growth will slow further over the coming months.”

U.S. equities are tracking their third straight month in the red, with the S&P 500 and the Nasdaq on course for their worst October since 2018.

The Fed kicks off a two-day monetary policy meeting on Tuesday. At the end of the meet the central bank is widely expected to hold interest rates steady, according to the CME Group’s FedWatch tool.

The Fed’s commentary on Wednesday would be crucial in assessing how long monetary policy could stay restrictive amid recent signs of economic strength.

Along with earnings, a slew of labor market data throughout the week will also be in focus, culminating in Friday’s non-farm payrolls report, for further clues on the strength of the U.S. economy.

At 9:46 a.m. ET, the Dow Jones Industrial Average was down 92.67 points, or 0.28%, at 32,836.29, the S&P 500 was down 5.35 points, or 0.13%, at 4,161.47, and the Nasdaq Composite was down 57.94 points, or 0.45%, at 12,731.54.

Pinterest jumped 14.8% as the image-sharing platform beat third-quarter revenue and profit estimates on a stabilizing digital advertising market.

U.S.-listed shares of Chinese companies such as JD.Com, Alibaba, PDD Holdings and Bilibili shed between 1.5% and 2.4% after data showed China’s manufacturing activity unexpectedly contracted in October.

VF Corp dropped 6.7% after the Vans sneaker maker withdrew its annual forecast, while cloud solutions provider Arista Networks gained 8.5% on an upbeat fourth-quarter revenue outlook.

Sarepta Therapeutics slumped 45.9% as the drug developer’s muscle disorder gene therapy failed in a late-stage trial. Shares of Sarepta’s client, Catalent, also fell 16.2%.

Advancing issues outnumbered decliners by a 1.50-to-1 ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and six new lows, while the Nasdaq recorded eight new highs and 126 new lows.

(Reporting by Amruta Khandekar and Shashwat Chauhan in Bengaluru; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta and Maju Samuel)