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Stocks decline on retreating rate bets post-retail sales report

Wall Street stocks finished lower on Wednesday after upbeat December U.S. retail sales data eroded expectations the Federal Reserve will kick off its rate-cut campaign as early as March. The benchmark S&P 500, fell to its lowest in over a week. Amazon,, Nvidia, and Alphabet dipped between 0.5% and 1% and weighed on the S&P 500 as the 10-year Treasury yield rose to over 4.1%, its highest this year.

Tesla dropped 2% after the electric-vehicle maker slashed prices of its Model Y cars in Germany a week after reducing prices for some China models. The interest rate-sensitive S&P 500 real estate sector index tumbled 1.9%.

Data showed discounts from retailers and increased motor-vehicle purchases supported a higher-than-expected rise in U.S. retail sales, keeping the economy on a solid footing in 2024. That reinforced the view that the Fed may not cut rates as quickly as previously expected this year.

Traders’ expectations of a 25-basis-point Fed rate in March dipped to 55%, from around 60% before the data was released.

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