At the close of trade, the Dow Jones Industrial Average index fell 107.39 points, or 0.31%, to 34,889. The S&P 500 index shed 15.42 points, or 0.35%, at 4,369. The tech-heavy Nasdaq Composite Index was down 55.59 points, or 0.38%, to 14,678. On Monday, all three stock benchmarks finished at all-time highs.
Total 10 of 11 sectors declined along with S&P 500, with real estate (down 1.32%) was worst performer, followed by consumer discretionary (down 1.18%), financials (down 1.06%), industrials (down 0.97%), and materials (down 0.95%), while information technology (up 0.44%) sector was top gainer.
The decline in the Wall Street came after the Labor Department reports showed inflation advanced at its fastest pace in nearly 13 years in June. Inflation has been a lingering concern for the markets as investors try to gauge how it will impact everything from the economic recovery's trajectory to the Federal Reserve's reaction.
The Labor Department said its consumer price index jumped by 0.9% in June after climbing by 0.6% in May. Excluding food and energy prices, core consumer prices still jumped by 0.9% in June following a 0.7% increase in May. The annual rate of consumer price growth accelerated to 5.4% in June from 5% in May, reaching the highest level since a matching spike in August of 2008. Core consumer prices were up by 4.5% year-over-year in June, reflecting acceleration from the 3.8% jump in May.
Also, weighing the sentiments was the results of an auction for 30-year Treasury notes that was not well received The Treasury Department revealed this month's auction of $24 billion worth of thirty-year bonds. The thirty-year bond auction drew a high yield of 2.000 percent and a bid-to-cover ratio of 2.19, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.33. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
JPMorgan and Goldman Sachs kicked off earnings season on Tuesday, with both banks reported quarterly results that exceeded market expectation on both the top and bottom lines.
Snack and beverage giant PepsiCo (PEP) also reported better than expected second quarter results and raised its full-year guidance.
Among Indian ADR, Tata Motors added 0.39% to $20.40, INFOSYS was flat at $21.05, Vedanta fell 1.5% to $14.46. HDFC Bank fell 0.2% to $73.10, WNS Holdings fell 0.19% to $80.56, and Wipro fell 0.92% to $7.53. ICICI Bank added 0.79% to $17.80, and Dr Reddys Labs shed 1.09% to $73.31.
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