Stock Market Today: Stocks Spiral After Strong Data Sparks Fed Fears
Data on the services sector and factory activity came in stronger than expected, pointing to a resilient U.S. economy.


Stocks started the week deep in the red as the November jobs report continued to weigh on investor sentiment. This morning's data, which showed services sector activity and factory output were both stronger than economists expected, provided additional signs that the U.S. economy remains resilient despite the Federal Reserve's best attempts to slow things down.
Specifically, the Institute for Supply Management's non-manufacturing index – which measures activity in the services sector – rose to 56.5 in November from October's reading of 54.4. This was well above the consensus estimate for a decline to 53.7. A separate report from the Commerce Department showed factory orders were up 1% from September to October, more than the 0.7% increase economists were expecting.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Good economic news is bad news for stocks, as it will keep the risk elevated that rates might have to end up higher later next year," says Edward Moya, senior market strategist at currency data provider OANDA. "The risks that the Fed might need to do more remain elevated and that is why this economy needs to head to a recession. This next recession, however, won't be rescued by quick Fed easing or a fiscal response, as that will fuel inflation risks."
Today's selling was widespread, with all 11 sectors closing in the red. Energy (-3.0%) was the biggest decliner, with consumer discretionary (-2.9%) a close second on weakness in Tesla (TSLA). The electric vehicle maker plunged 6.4% after reports from Bloomberg and Reuters suggested it is planning on lowering December production at its Shanghai, China, plant by 20% from its November output. Tesla denied the media reports.
As for the major indexes, the Nasdaq Composite slumped 1.9% to 11,239, the S&P 500 Index fell 1.8% to 3,998, and the Dow Jones Industrial Average shed 1.4% to 33,947.
Use High-Yield ETFs for Defense
Investors might want to brace for some choppy trading through the Federal Reserve's upcoming policy decision and the latest consumer price index (CPI) reading – both slated for next Wednesday. "After [Fed Chair Jerome] Powell's speech last week, I would have expected the market to perform well heading into the next Fed decision. Then job market data offset such traction," says Guido Petrelli, founder and CEO of market insight firm Merlin Investor. "The market now seems to take a conservative position while waiting for more clarifications from the Fed meeting."
Petrelli says it's likely the Fed will raise rates by 0.50%, as expected, but that "a crucial indication" will come in the Powell presser that will follow the policy announcement. "That's why I wouldn't expect any significant positive move from the market this week, with some reasonable drop coming from playing defense."
Investors playing defense over the long term have plenty of options at their disposal. In addition to healthcare and consumer staples stocks – which tend to do well in recessionary environments – investors can also seek out safety in dividend-paying names. While there's no shortage of dividend-paying stocks on Wall Street, you can also take a more diversified approach with high-yield ETFs. The nine names featured here cover both conservative and aggressive strategies but they all have one thing in common: healthy yields that are well above the broader market.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summer
The Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
My Three-Day Rule for Investing: And If it Applies Now
Stock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Is It Time to Invest in Europe?
Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Stock Market Today: Investors Weigh Weekend Negotiations
Investors, traders and speculators will look to Switzerland for answers about the most compelling issue confronting global markets.
-
May Fed Meeting: Updates and Commentary
The May Fed meeting came and went with little fanfare as Fed Chair Powell & Co. stuck to their data-dependent script toward interest rates amid tariff uncertainty. The May Fed meeting came and went with little fanfare as Fed Chair Powell & Co. stuck to their data-dependent script toward interest rates amid tariff uncertainty.
-
Stock Market Today: Great Power Affairs Mesmerize Markets
The U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
-
Stock Market Today: Trump Retreats, Markets Rejoice
Stocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw Back
Tesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
-
Stock Market Today: Dow Drops 971 Points as Powell Pressure Ramps Up
President Trump is increasing his attacks against Jerome Powell, insisting the Fed chair cut interest rates.