NEW YORK (AP) — U.S. stocks are giving back some of last week’s rally on Monday, as bitcoin and other former stars of Wall Street fall again.
The S&P 500 slipped 0.4% and was threatening to break a five-day winning streak. The Dow Jones Industrial Average was down 204 points, or 0.4%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.5% lower.
Last week’s rally was largely due to strengthening hopes that the Federal Reserve will cut its main interest rate at its meeting next week to help shore up the slowing job market. Such hopes are still high, with traders betting on a nearly 88% chance of it, according to data from CME Group.
But yields for longer-term Treasurys nevertheless rose in the bond market on Monday. It was part of a worldwide climb for yields after the head of the Bank of Japan hinted at a possible hike to interest rates there.
When bonds are paying higher yields, they can attract investors who otherwise would buy stocks or cryptocurrencies. Higher yields undercut prices for all kinds of investments, and they particularly hurt those seen as the most expensive.
Bitcoin, which was soaring around $125,000 in October, dropped below $86,000. That’s down more than 5% from a day earlier.
That in turn sent stocks lower across the crypto industry. Coinbase Global sank 3.7%, and Robinhood Markets fell 4.6%, for example.
Strategy, the company that used to be known as MicroStrategy and now raises money just to buy bitcoin, lost 8%. It said that it's raised a fund of $1.44 billion in U.S. dollars, not in bitcoin, by selling stock in order to help pay its dividends on preferred shares and interest on its debt.
On the winning side of Wall Street was Synposys, which rose 3.9%. It said Nvidia is investing $2 billion in its stock as part of an expanded partnership between the two. Nvidia, which has become Wall Street’s most influential stock, swung from an early loss to a modest gain of 0.9%.
The market, meanwhile, had a mixed reaction to what seems like a strong start for the holiday shopping season. Consumer spending during the Black Friday and Cyber Monday retailing bonanza was expected to exceed expectations, despite uncertainty over the outlook for the U.S. economy.
Amazon rose 0.4%, but Best Buy fell 1.9%.
In stock markets abroad, indexes were mixed amid sharp moves.
France’s CAC 40 fell 0.3%, dragged down in part by a 5.1% loss for Airbus.
The European aerospace giant said Monday that most of its fleet of 6,000 A320 passenger jets have received an update after a weekend software glitch that could have affected flight controls. Travelers faced minor disruptions heading into the weekend as airlines around the world scrambled to push the software updates out after Airbus warned of the problem Friday, one of the busiest travel days of the year.
In Japan, the Nikkei 225 tumbled 1.9% on worries about the possibility of higher interest rates. Japan’s benchmark interest rate has remained near zero for years in hopes of juicing the economy. Now inflation is holding above the Bank of Japan’s target of about 2%.
In the bond market, the yield on the 10-year Treasury rose to 4.08% from 4.02% Friday.
It had briefly topped 4.09% earlier, but it pulled back after a report showed activity for U.S. manufacturers shrank by more last month than economists expected.
Jobs are under pressure at manufacturers, and the majority told surveryers for the Institute for Supply Management that they're still more focused on managing headcount than on hiring. Several manufacturers also said tariffs are continuing to make conditions complicated.
"Conditions are more trying than during the coronavirus pandemic in terms of supply chain uncertainty,” one manufacturer told the ISM.
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AP Business Writer Elaine Kurtenbach contributed.