Stocks were notably lower in early trading Tuesday as investors took in the latest retail sales data and another batch of bank earnings. The main indexes managed to pare most of these losses by the close, though, even as Treasury yields spiked.
Ahead of the opening bell, data from the Census Bureau showed retail sales rose 0.7% from August to September, more than economists were expecting. Excluding auto sales, retail sales were up 0.6%.
"Retail sales defied expectations with a large September gain, putting consumer spending on very strong footing entering into Q4," says Jonathan Millar, senior U.S. economist at Barclays. "The latest print comes on top of a series of stronger-than-expected readings for nearly all major indicators since the September Federal Open Market Committee meeting," Millar adds.
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Still, according to CME Group, futures traders are pricing in an 88% chance the Fed will keep interest rates unchanged at its upcoming meeting, slightly higher than the 87% probability from one week ago.
Bank stocks mixed after earnings
On the earnings front, Bank of America (BAC, +2.3%) and Bank of New York Mellon (BK, +3.8%) closed higher after both financial firms reported higher-than-expected third-quarter earnings.
Dow stock Goldman Sachs (GS), on the other hand, fell 1.6% after earnings. The big bank said Q3 earnings were down 36% year-over-year to $5.47 per share, though this was still more than analysts were anticipating. Revenue of $11.8 billion also beat estimates.
Nvidia sheds $53 billion in market cap
Nvidia (NVDA) was another notable decliner today, with the semiconductor stock slumping 4.7% after the U.S. said it will expand restrictions on sales of artificial intelligence (AI) chips to China. While shares finished well off their session lows after a company spokesperson said that Nvidia doesn't "expect a near-term meaningful impact" on financial results, today's slide still chopped $53 billion from the trillion-dollar chipmaker's market cap.
Also in single-stock news, VF Corp (VFC) surged 14.0% after The Wall Street Journal indicated activist investor Engaged Capital is building a stake in the North Face parent. The report suggests Engaged wants to help VFC cut unnecessary costs and potentially shake up the board of directors.
It's been a rough stretch for VFC stock, which is down 33% for the year-to-date. Off the price charts, the retailer slashed its dividend in February, though at 7.4%, it remains one of the highest yielding dividend stocks in the S&P 500.
As for the major indexes, the rate-sensitive Nasdaq Composite was the worst performer – shedding 0.3% to 13,533 as yields on the 2-year and 10-year Treasuries headed back toward levels not seen in nearly two decades. The broader S&P 500 ended marginally lower at 4,373, while the blue chip Dow Jones Industrial Average eked out a 0.04% gain to 33,997.
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