Wall Street’s main indexes have fallen as better than expected housing data fuelled worries of more interest rate hikes by the US Federal Reserve while Tesla climbed after Rivian agreed to adopt its charging standard.
US single-family home-building surged in May to its highest in more than a year and permits issued for future construction also climbed, suggesting the housing market may be turning a corner.
“We saw housing starts and building permits come in much stronger than anticipated and it seems the economy remains stronger than expected despite all the calls for a potential recession,” Sam Stovall, chief investment strategist at CFRA Research, said.
Tesla Inc added 2.0 per cent after Reuters reported that Rivian Automotive has agreed to adopt Tesla’s charging standard, adding momentum to the EV giant’s bid to set the industry standard.
Eight of the 11 S&P 500 sub-sectors were in the red, with the energy index leading declines.
The rate-sensitive real estate sector fell 1.4 per cent.
US markets ended lower on Friday as comments from Fed officials curtailed optimism that the central bank was nearing the end of its aggressive interest rate hikes.
Traders anticipate a 72 per cent chance of Fed hiking its key benchmark rates by 25 basis points in July, according to CMEGroup’s Fedwatch Tool.
Investors will look out for comments from Fed Vice Chair Michael Barr later on Tuesday and Fed Chair Jerome Powell’s semi-annual monetary policy testimony to the US House Financial Affairs Committee on Wednesday.
PayPal Holdings rose 1.7 per cent after KKR & Co agreed to purchase up to 40 billion euros ($A64 billion) worth of the payments firm’s “buy now, pay later” loans in Europe.
Nike slipped 3.0 per cent after Morgan Stanley flagged a risk of margin pressure from inventory glut.
US-listed shares of Chinese companies including Alibaba Group, JD.com and PDD Holdings fell between 3.0 per cent and 7.0 per cent as China made a smaller than expected cut to its benchmark lending rates.
Alibaba Group also said Daniel Zhang would step down from his roles as CEO and chairman to focus on the company’s cloud division.
In early trading, the Dow Jones Industrial Average was down 228.00 points, or 0.66 per cent, at 34,071.12, the S&P 500 was down 22.41 points, or 0.51 per cent, at 4,387.18, and the Nasdaq Composite was down 40.51 points, or 0.30 per cent, at 13,649.06.
Adobe Inc fell 1.8 per cent following a report that European antitrust regulators were preparing to investigate the firm’s deal to buy cloud-based designer platform Figma.
Dice Therapeutics Inc jumped 37.6 per cent after Eli Lilly and Co said it would buy the drug maker in an all-cash deal for about $US2.4 billion ($A3.5 billion).
Declining issues outnumbered advancers for a 2.43-to-1 ratio on the NYSE and a 1.82-to-1 ratio on the Nasdaq.
The S&P index recorded 11 new 52-week highs and no new low while the Nasdaq recorded 38 new highs and 40 new lows.