US STOCKS-Wall Street dips as yields climb; crypto stocks tumble

By Chuck Mikolajczak

NEW YORK, Dec 1 (Reuters) - U.S. stocks edged lower on Monday, weighed down by a rise in Treasury yields and economic data that showed the pressure from tariffs on the manufacturing sector, as investors looked toward the Federal Reserve's policy announcement next week.

The Institute for Supply Management's survey showed U.S. manufacturing contracted for the ninth straight month in November, as factories dealt with slumping orders and higher prices as the drag from tariffs lingered.

Markets have largely priced in a rate cut from the Fed at the conclusion of its two-day policy meeting on December 10. Markets are pricing in an 87.4% chance of a 25 basis-point cut, according to CME's FedWatch Tool.

"The market actually is still obviously earnings-driven, we went through earnings season, but now it's the Fed," said Joe Saluzzi, partner, co-founder and head of Equity Market Structure Research and co-head of Equity Trading at Themis Trading in Chatham, New Jersey.

"I see no reason why the uptrend doesn't continue, at least, not as quickly, but maybe more of a grind up to the end of the year."

The Dow Jones Industrial Average .DJI fell 295.65 points, or 0.62%, to 47,420.77, the S&P 500 .SPX lost 23.22 points, or 0.34%, to 6,825.87 and the Nasdaq Composite .IXIC lost 68.69 points, or 0.29%, to 23,297.00.

While many policymakers have struck a cautious tone, dovish signals from a few key voting members in recent weeks, along with reports that White House economic adviser Kevin Hassett is a leading contender to succeed Fed Chair Jerome Powell, have heightened expectations for further monetary easing in the months ahead.

Powell is scheduled to speak after the market close but is unlikely to address monetary policy due to the close proximity to the central bank's policy meeting.

"I guess they'll look for hints of anything that he could say, but it looks like it's a done deal," said Saluzzi.

Investors are also waiting for a delayed September report on the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, due on Friday.

Despite expectations for a cut, U.S. Treasury yields were higher on Monday following weakness in Japanese and European government bonds in the wake of comments from Bank of Japan Governor Kazuo Ueda, who signaled that conditions were aligning for a possible rate hike. Bond yields move inversely to prices.

The rise in yields weighed on S&P 500 sectors such as real estate .SPLRCR and utilities .SPLRCU, which are seen by many investors as bond proxies.

Declines were also prevalent among crypto stocks, with Coinbase COIN.O down 5.1% and U.S. listed shares of Bitfarms BITF.O losing 6.9%, as bitcoin BTC= stumbled about 7% and dropped below $85,000. The crypto market has lost more than $1 trillion in value since hitting a record of around $4.3 trillion, according to CoinGecko.

Strategy MSTR.O, the world's largest holder of the cryptocurrency, tumbled 7% after falling more than 12% on the session, and cut its earnings forecast for 2025, citing a weak run in bitcoin.

Big-box retailers were in focus as Cyber Monday sales kicked off, with shoppers expected to spend $14.2 billion online, according to Adobe Analytics. Shares of Walmart WMT.N and Target TGT.N advanced 1% and 0.5%, respectively.

Synopsys SNPS.O gained 4.9% after AI chip leader Nvidia NVDA.O said it had invested $2 billion in the semiconductor design software provider.

Declining issues outnumbered advancers by a 1.45-to-1 ratio on the NYSE and by a 1.91-to-1 ratio on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and one new low, while the Nasdaq Composite recorded 73 new highs and 63 new lows.