S&P 500, Dow ease as focus shifts to Fed; tech pushes Nasdaq to closing record
The S&P 500 and Dow fell on Tuesday, pausing after recent strong gains as focus shifted to the Federal Reserve, while the Nasdaq ended at an all-time high for a second straight day after briefly rising above the 10,000 mark for the first time.
The Fed began a two-day meeting. While no major policy announcements are expected when the U.S. central bank wraps up on Wednesday, investors will scrutinize its remarks on the health of the economy, which has been reopening after coronavirus-related closures.
The Nasdaq’s gains came on the back of strong gains in tech-related shares, a day after the index became the first of Wall Street’s major indexes to confirm a new bull market. Apple, up 3.2%, gave the Nasdaq its biggest boost on Tuesday.
The benchmark S&P 500 fell back into negative territory for the year after temporarily erasing those losses on Monday.
“It strikes me as maybe a reflexive selloff as a result of a tremendous rally over the past week. There’s no news headline that screams bearish catalyst to me. But conversely, other than the nonfarm payrolls data, the past two weeks haven’t had super bullish catalysts either,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.
“In the grand scheme of things, it seems like the market has caught a bullish fever, and it’s feeding on itself.”
The rally in U.S. stocks accelerated last week after strikingly upbeat May jobs data strengthened views that the worst of the economic fallout from the pandemic was over.
Financial and industrial shares, which have been among stocks that have surged in recent weeks on hopes of an improved economic outlook, were the biggest drags on the benchmark S&P 500 on Tuesday.
The Dow Jones Industrial Average fell 300.14 points, or 1.09%, to 27,272.3, the S&P 500 lost 25.21 points, or 0.78%, to 3,207.18 and the Nasdaq Composite added 29.01 points, or 0.29%, to 9,953.75.
U.S. financial market operators, including the New York Stock Exchange, held a moment of silence in honor of George Floyd, a 46-year-old African American who died on May 25 after a white police officer knelt on his neck for nearly nine minutes.
The S&P 1500 airlines index tumbled 7.5%, while cruise operators Carnival Corp and Norwegian Cruise Line Holdings Ltd fell following their recent sharp recovery amid recent signs of a pickup in global travel.
Declining issues outnumbered advancing ones on the NYSE by a 3.09-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.
The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 56 new highs and one new low.
Volume on U.S. exchanges was 13.82 billion shares, compared to the 12.54 billion average for the full session over the last 20 trading days.