Stock market today: US stocks fall as rate-cut bets get a reality check

US stocks fell on Wednesday as optimism over interest rate cuts dimmed while worries over China’s economy continued a challenging start to the year for investors. The Dow Jones Industrial Average (^DJI) fell almost 0.3%, while the S&P 500 (^GSPC) slid nearly 0.6%, set to build on Tuesday’s losing start to the holiday-shortened week. The Nasdaq Composite (^IXIC) was down about 0.6%. The move lower in stocks comes as investors have trimmed their bets for a March rate cut. As of Wednesday, investor bets place a 57% chance the Fed cuts in March, per the CME FedWatch Tool. That’s down from a 67% chance last week and a 71% chance seen a month ago. Stocks have struggled as policymakers push back against persistent bets that central banks will cut rates early and often in 2024. ECB president Christine Lagarde on Wednesday joined the likes of Federal Reserve governor Chris Waller in warning that expectations of imminent loosening are too high. Another knock back came from disappointing GDP data, suggesting that China’s growth is flagging despite stimulus measures. Oil prices fell amid fears of a pullback in demand from the world’s second-biggest economy. Also out Wednesday, the December retail sales report showed consumer spending remains resilient. Retail sales grew 0.6%inDecember, according to Census Bureau data. Economists had expected a 0.4% increase, according to Bloomberg data.