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Stock market today: Wall Street starts the holiday week with a downward trend | region

NEW YORK (`) — Stock prices on Wall Street fell in afternoon trading Tuesday to start a holiday-shortened week.

The S&P 500 slipped 0.6%, having just its second losing week in the last 16 years. The losses pushed the benchmark index further below the record it set last week.

The Dow Jones Industrial Average fell 38 points, or 0.1%, as of 2:54 p.m. Eastern time. The Nasdaq Composite fell 1.1%.

Markets in the US were closed on Monday for Presidents Day.

Technology stocks were among the biggest weights in the market. Chipmaker Nvidia fell 4.7% and Microsoft fell 0.6%.

Major retailers reported mixed profits. Walmart rose 3.5% after reporting stronger-than-expected results for its latest quarter and issuing sales forecasts that exceeded Wall Street expectations.

The home improvement retailer Home Depot fluctuated between small profits and losses. It beat Wall Street's earnings forecasts but gave investors a disappointing profit forecast for the year.

Excluding earnings, credit card company Capital One Financial rose 0.2% as it moves forward with its $35 billion acquisition of Discover Financial Services. Discover rose 12.9%, posting the largest gain in the S&P 500.

Markets have endured a tough week with economic reports pointing to stubborn inflation weighing on consumer spending. This has raised expectations that the Federal Reserve will begin cutting interest rates as early as 2024. The central bank will release minutes from its last meeting on Wednesday, potentially giving investors more insight into its next move.

The central bank held interest rates steady at its last meeting in late January and investors had hoped for rate cuts as early as March. Those hopes were dashed by the Fed's comments and the latest economic data. According to CME's FedWatch tool, Wall Street is now betting on a possible rate cut in May and a likely rate cut in June.

These lowered expectations of interest rate cuts and renewed inflation concerns have essentially tripped up the broader market.

“The narrative that got us to these levels is being strongly questioned,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

Bond yields fell. The yield on the 10-year Treasury note fell to 4.25% from 4.28% late Friday. The two-year Treasury yield fell to 4.58% from 4.65%.

Markets in Europe were mixed and markets in Asia were mostly higher.

China's central bank left its benchmark one-year lending rate unchanged on Tuesday but cut its five-year lending rate by 25 basis points to 3.95%. This came as a surprise as the five-year interest rate was cut for the first time since May 2023.

Investors are in for a relatively weak week of economic updates, with the latest home sales data expected on Thursday. The broader real estate market remains tight with demand still outstripping supply. Mortgage rates also remain high, although they have been easing since their last peak in late October, when the average interest rate on a 30-year mortgage reached 7.79%.

Companies across a wide range of industries will report their latest earnings this week. Chipmaker Nvidia will release its results on Wednesday along with online craft marketplace Etsy. The online travel company Booking Holdings reported this on Thursday. The latest results could give investors a clearer idea of ​​the future direction of the economy.

More than 80% of companies in the S&P 500 have released their latest results. Analysts surveyed by FactSet expect overall fourth-quarter earnings growth of about 3.3% and forecast current-quarter earnings growth of about 3.6%.

Wall Street will have to wait until the end of February for another major update on inflation, when the government releases its monthly personal consumption and spending report, which is the Fed's preferred measure.

“The key question to answer now is whether inflation has bottomed out and if so, is it going sideways or rising again,” Samana said.

Business journalists Yuri Kageyama and Matt Ott contributed to this report.

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