Dow closes lower Wednesday, notching third straight losing session as bond yields rise: Live updates

Stocks fell Wednesday as Treasury yields tracked higher following the release of stronger-than-expected U.S. economic data.

The Dow Jones Industrial Average declined 91 points, or 0.2%. The S&P 500 and Nasdaq Composite lost 0.5% and 0.6%, respectively.

Charles Schwab shed 1.9% after reporting mixed quarterly results. Walgreens and Caterpillar both lost more than 4%, leading the Dow’s losses. Meanwhile, Boeing gained about 1%, making it one of the biggest gainers in the Dow after weeks of heavy losses.

Retail sales data for December came in stronger-than-expected, indicating a resilient consumer and putting aggressive rate cuts from the Federal Reserve into doubt. Retail sales were up 0.6% from November, and gained 0.4% month-over-month excluding autos. Economists polled by Dow Jones had estimated a 0.4% month-to-month increase in retail sales and 0.2% ex-autos.

The 10-year Treasury yield was last trading 4 basis points higher at 4.11%, continuing its rise from Tuesday after Federal Reserve Governor Christopher Waller warned easing monetary policy may come slower than anticipated.

So far, traders are pricing in a roughly 52% chance that the Federal Reserve begins cutting rates in March as hopes mount for a pivot, according to CME Group’s FedWatch tool.

“By the end of this year, rates will likely be lower than they are now — but it’s not going to be a straight line,” said Thomas Martin, senior portfolio manager at Globalt Investments.

“In the meantime, people who are positioned aggressively for more rate declines and for higher stocks, are maybe pulling in their horns and getting a little bit more diversified. You do want to hold bonds, but you also want to hold stocks,” added Martin.

Traders also weighed weaker-than-expected China GDP data that were released overnight.