Investing.com – U.S. stocks closed mostly lower on Tuesday, after Federal Reserve officials signalled the possibility of faster rate hikes while geopolitical tensions over North Korea returned.
Risk-on sentiment eased, as investors mulled over hawkish comments from Kansas City Fed President Esther George on Tuesday while North Korean ambassador to the UK said the country will proceed with its sixth nuclear test.
Fed member George said that the U.S. central bank should keep gradually raising short-term interest rates despite the recent slowdown in GDP and car sales.
Meanwhile, Boston Fed President Eric Rosengren warned, that faster interest rate hikes would be needed should unemployment continue to drop below the level of “natural employment” and cause the economy to overheat.
Investors expectations for a June rate hike soared to the highest level, pushing U.S. treasury yields to a five-week high.
The U.S. 10-Year hit a five-week high of 2.409, up 1.37%.
According to investing.com’s Fed rate monitor tool, 80% of traders expect the Federal Reserve to hike interest rates in June, compared to 63% in the previous week.
In corporate earnings news, Walt Disney Company (NYSE:DIS) topped second-quarter earnings expectations but fell short of revenue estimates.
Disney reported earnings of $1.50 per share on $13.34 billion in revenue against expectations of earnings of $1.41 per share on $13.45 billion in revenue.
Disney traded 1% lower in afterhours trade.
The Dow Jones Industrial Average at 20,975.78, down 0.17%. The S&P 500 fell 0.10% while the Nasdaq Composite closed higher at 61520.59, up 0.29%.
The ‘Bulls and Bears’ on Wall Street
The top Dow gainers included; Nike Inc (NYSE:NKE) up 1.1%, Wal-Mart Stores Inc (NYSE:WMT) up 0.8%, while Apple Inc (NASDAQ:AAPL) added 0.6%.
Chevron Corporation (NYSE:CVX) down 1.5%, Cisco Systems Inc (NASDAQ:CSCO) down 1.1% and Merck & Company Inc (NYSE:MRK) down 1.1%, were among the worst Dow performers of the session.