Consumer companies plunged as traders braced for a pause in Federal Reserve rate cuts.
The SPDR Select Sector Consumer Discretionary exchange-traded fund, which tracks the consumer-discretionary industry group of the S&P 500, plunged by 4.5%, though it remains 29% higher for the year to date.
The Fed's tally of internal projections show officials expect to make fewer rate reductions, with most penciling in two cuts for 2025, down from four at their meeting in September. Oddsmakers on futures markets shifted to a prediction of a single rate cut.
"Inflation risks are back, and the Fed is clearly concerned," said Charlie Ripley, senior investment strategist at money manager Allianz Investment Management, in e-mailed commentary.
Fed Chairman Jerome Powell said the labor market was still resilient, with relatively few people in danger of losing their jobs. Hiring, however, has slowed, which Mr. Powell said was a sign of softening labor demand.
The central banker also noted weakness in the property market, with housing-services inflation easing. Housing starts fell 1.8% to a rate of 1.29 million in November.
General Mills shares slid after the packaged-food company reported better-than-expected fiscal second-quarter earnings but lowered its fiscal-year outlook.
Rising costs of ingredients such as cocoa, beef and coffee are likely to weigh on food processors, restaurants and grocery stores analyst warned.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
December 18, 2024 17:31 ET (22:31 GMT)
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