Tuesday began as a calm day on Wall Street, but markets swiftly turned negative after the Institute for Supply Management released data highlighting an unexpected surge in price pressures within the service sector for December.
The report reignited fears over persistent inflation and mounting concerns over the economic fallout from tariffs.
The ISM’s Services PMI rose to 54.1% in December, surpassing expectations and marking the third-highest reading of 2024. This figure signals continued expansion in the services industry.
Yet the Prices Index, which reflects input costs for service providers, jumped sharply to 64.4%, up from 58.2% in November, significantly outpacing consensus estimates of 57.5%. This was the highest print since February 2023 and a clear sign that inflationary pressures are not easing as anticipated.
By midday, all major stock indices were trading lower. The Nasdaq 100 was hit particularly hard as rising Treasury yields soured risk sentiment, putting pressure on growth-oriented technology stocks. The yield on the 30-year Treasury bond surged by 6 basis points to 4.91%, its highest level since November 2023, reflecting growing unease in the bond market.
The sell-off extended to bond ETFs, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) falling by 1% on the day.
Amid this broader market weakness, only a handful of sectors managed to resist the selling pressure. Energy, materials and financials emerged as the outperformers.
In the commodities market, oil prices rebounded after earlier losses this week. West Texas Intermediate light crude climbed 1% to settle at $73.70 per barrel, recovering from Monday’s decline, while natural gas prices plunged 5%.
Precious metals saw modest gains, with gold up 0.6% and copper rising 1.1%, reflecting a cautious shift toward safer assets.
The rally in cryptocurrencies came to a sudden halt. Bitcoin (CRYPTO: BTC) dropped 5% to $97,000, poised to snap a six-session winning streak.
Tuesday’s Performance In Major US Indices, ETFs
| Major Indices | Price | 1-day %chg |
| Dow Jones | 42,615.09 | -0.2% |
| S&P 500 | 5,938.52 | -0.6% |
| Russell 2000 | 2,251.46 | -0.7% |
| Nasdaq 100 | 21,279.82 | -1.3% |
According to Benzinga Pro data:
- The SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.7% to $591.56.
- The SPDR Dow Jones Industrial Average (NYSE:DIA) eased 0.1% to $426.93.
- The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) fell 1.3% to $517.59.
- The iShares Russell 2000 ETF (NYSE:IWM) dipped 0.6% to $223.03.
- The Energy Select Sector SPDR Fund (NYSE:XLE) outperformed, up 1.6%; the Technology Select Sector SPDR Fund (NYSE:XLK) lagged, down 1.4%.
Monday’s Stock Movers
- Nvidia Corp. (NASDAQ:NVDA) tumbled more than 5%, reversing from fresh record highs reached at the market open and heading for its worst trading session since early September 2024. The sharp drop came despite upbeat commentary from Wall Street analysts following the chipmaker’s key announcements at CES 2025.
- Tesla Inc. (NASDAQ:TSLA) fell over 4%, after Bank of America Securities lowered the stock rating from Buy to Neutral.
- Moderna Inc. (NASDAQ:MRNA) shares jumped 10.6% to $47.10 on Tuesday following the first reported bird flu death in the U.S. as the company works on developing a vaccine for the H5N1 virus.
- Microstrategy Inc. (NASDAQ:MSTR) tumbled by over 8% amid Bitcoin weakness.
- Palantir Technologies Inc. (NASDAQ:PLTR) fell by over 6%, following Monday’s 5% drop ignited by a bearish Morgan Stanley research note.
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