MARKET SNAPSHOT

U.S. stocks paused their post-election rally ahead of the October inflation report. Treasury yields rose in the first session of a shortened week as markets braced for sticky inflation and a not-so-fast cycle of interest rate cuts. Oil futures rebounded slightly, although forces weighing down on energy prices remain in place. Gold prices continued to decline as the dollar strengthened further.

MARKET WRAPS

EQUITIES

A rise in government bond yields put a pause on a vigorous stock rally that has propelled major indexes to records in recent sessions.

U.S. stocks edged lower after the S&P 500, Dow industrials and Nasdaq Composite hit fresh all-time highs Monday. The S&P 500 notched its first decline since Election Day, which triggered a roaring rally across stocks and cryptocurrencies.

The S&P 500 and Nasdaq Composite slipped 0.3% and 0.1%, respectively. The Dow Jones Industrial Average lost 0.9%.

The yield climb in recent weeks reflects heightened concerns about inflation, which some economists say could worsen under a Trump administration. Many investors are also expecting bigger government deficits in coming years, which could put further upward pressure on bond yields. At some point, that could catch up to the stock market, investors say.

Earlier Tuesday, Chinese shares closed lower, dragged by insurance and semiconductor stocks. Chinese equities may face continued volatility in the near future as investors wait for more potential fiscal stimulus, said Vivian Lin Thurston, portfolio manager at William Blair.

The benchmark Shanghai Composite Index shed 1.4%, the Shenzhen Composite Index dropped 0.8% and the ChiNext Price Index was down 0.1%. Hong Kong's Hang Seng Index gave up 2.8%.

Japan's Nikkei Stock Average fell 0.4%, reversing earlier gains amid concerns over U.S. President-elect Donald Trump's expected cabinet nominees.

Australia's S&P/ASX 200 gave up its early strength, slipping 0.1% amid weakness in mining stocks.

New Zealand's NZX-50 added 0.5%, paring its week-opening losses on strength in large-cap stocks.

COMMODITIES

Oil futures finished higher, recouping a small portion of back-to-back losses driven by worries about the prospects for demand, which contributed to a retreat in the U.S. benchmark below the $70-a-barrel threshold.

Oil prices ended off the session's highs after the Organization of the Petroleum Exporting Countries cut its outlook for growth in crude demand for this year and next.

West Texas Intermediate crude for December delivery edged up 0.1% to settle at $68.12 a barrel on the New York Mercantile Exchange. January Brent crude climbed nearly 0.1%, settling at $71.89 a barrel on ICE Futures Europe.

"Oil prices have been under pressure due to bearish demand sentiment," said Matthew Polyak, managing partner at Hummingbird Capital.

Front-month gold futures fell 0.4% to $2,600 an ounce, making it the third straight session that gold futures have declined, and the fourth lower session in the past five.

The results of the U.S. presidential election continue to be the main source of pressure for gold, said Samer Hasn of XS.com.

"Gold's decline comes amid concerns about the higher-for-longer interest rates with Donald Trump's return to the White House and the implementation of policies that might fuel inflation and business growth, which was reflected in the continued rise in Treasury yields," said Hasn.

TODAY'S TOP HEADLINES

The Fed's Kashkari Sees a December Interest-Rate Cut. Unless There's an Inflation Surprise.

Federal Reserve Bank of Minneapolis President Neel Kashkari sees a resilient U.S. economy, progress on inflation, and interest rates continuing to come down. But the destination for rate cuts might be higher than initially anticipated thanks to stronger productivity growth-a favorable scenario-or new inflationary pressures, in a less optimistic outcome.

"We continued to be surprised by the resilience of the U.S. economy," Kashkari said at the Yahoo Finance Invest event in New York on Tuesday. "Right now the fundamentals seem strong and I'm optimistic that's going to continue."

The Federal Open Market Committee reduced its target for the federal-funds rate by a quarter of a percentage point on Nov. 7, to a range of 4.5%-4.75%. That followed a half-point cut in September, after keeping rates unchanged for more than a year.

OPEC Trims Demand Forecast for Fourth Straight Month

The Organization of the Petroleum Exporting Countries cut its forecast for oil-demand growth for the fourth consecutive month after further delaying its planned output hike amid market concerns over weaker global consumption and lower prices.

The Vienna-based cartel now expects demand to grow by 1.82 million barrels a day this year and 1.54 million barrels a day the next from previous estimates of 1.93 million and 1.64 million barrels a day, respectively.

The trim reflects data received so far this year, but the overall forecast remains optimistic.

J&J Sues U.S. Over Hospital Drug-Discounting Program

Johnson & Johnson launched a legal challenge against a federal health agency blocking the company's quest to tighten the way it provides lucrative drug discounts to hospitals.

J&J filed a lawsuit in federal court in Washington on Tuesday against the heads of the U.S. Department of Health and Human Services and one of its agencies, seeking a court ruling that says J&J's plan is legal and to prevent the agency from rejecting it.

The lawsuit escalates the pharmaceutical industry's fight to rein in the federal drug-discount program known as 340B. The program, created in 1992, requires drugmakers to provide steep discounts on outpatient drugs to hospitals and clinics that serve uninsured and low-income patients.

Justice Department Sues to Block UnitedHealth's $3.3 Billion Bid for Amedisys

The Justice Department on Tuesday sued to block UnitedHealth Group's $3.3 billion acquisition of Amedisys, alleging the deal would give the health-industry giant too much power over the market for home health and hospice services.

The government's move represents an effort to stem the roll-up of different healthcare services under a single owner. UnitedHealth last year acquired one of Amedisys's major competitors, LHC Group.

UnitedHealth also owns the country's largest health insurer, UnitedHealthcare, and its Optum arm includes a sprawling network of physician groups, clinics and a large pharmacy-benefit manager, among other assets. If the deal went through, Amedisys would become part of Optum.

Disney Explores Wider Field of Candidates to Succeed Iger

Disney is exploring fresh candidates in its search for a successor to Bob Iger, including some from outside its castle walls, as the board and its newly named chairman move to bring order to a closely watched succession process.

Names that have surfaced in Disney's deliberations in recent months include external candidates, such as Andrew Wilson, chief executive officer of game company Electronic Arts, people familiar with the matter said. Disney is working with recruiters from the firm Heidrick & Struggles to help guide its review of external candidates, and the search firm has identified at least two more potential external candidates, these people said.

The developments are a sign that incoming board chairman and former Morgan Stanley CEO James Gorman, who starts his new role on Disney's board in January, wants to explore a range of candidates, and that the stable of contenders may broaden. Disney said last month that it plans to name Iger's replacement in early 2026, later than initially planned.

Expected Major Events for Wednesday

00:00/AUS: Oct Vacancy Report

00:30/AUS: 3Q Wage Price Index

03:00/AUS: Nov Monthly Leading Indicator of Employment

20:00/NZ: Oct REINZ Residential Market Report

20:00/NZ: Oct REINZ Monthly Housing Price Index

21:45/NZ: Oct Selected Price Index

00:00/AUS: Nov Consumer Inflationary Expectations Survey

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

November 12, 2024 16:55 ET (21:55 GMT)

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