US Stock Market: DJIA, S&P500, Nasdaq and Russell ended in red on Tuesday
- The S&P 500 fell 17.59 points, or 0.4%, to 4,122.47
- The Dow Jones fell 58.13 points, or 0.2%, to 32,774.41
- The Nasdaq fell 150.53 points, or 1.2%, to 12,493.93
Smaller company stocks also fell, putting the Russell 2000 index down 1.5%.
The largest drags on the market were technology stocks and retailers, outweighing increases in energy, financials, and other sectors. Bond yields increased significantly.
The S&P 500 dropped 17.59 points to 4,122.47. The Dow Jones Industrial Average fell 58.13 points to settle at 32,774.41. The Nasdaq dropped 150.53 points to 12,493.93. The Russell 2000 ended down 28.31 points at 1,912.89.
After a surprisingly strong 9.1% gain in July, the benchmark S&P 500 index has been mostly selling off this month as Wall Street tries to gauge how aggressively the Federal Reserve will continue to raise interest rates in order to combat inflation and what that will mean for the economy and corporate profits.
The U.S. Labor Department will release its July report for consumer prices Wednesday, followed by its producer prices report on Thursday. Investors and economists will look for any signs that the Federal Reserve’s aggressive rate hikes over the past few months have helped to bring inflation under control.
The Fed has raised rates four times this year in an effort to hit the brakes on the economy and cool the hottest inflation in four decades. Wall Street is worried that the central bank could slam the brakes too hard and tip the economy into a recession. Last week’s strong July jobs report has most economists predicting the Fed will again raise short-term interest rates by as much as another three-quarter of a point at its September meeting.
Most economic data already points to a slowdown. The U.S. economy has now contracted for two straight quarters, which constitutes an informal indicator of a recession. But recession fears have been tempered by a hot jobs market with unemployment at historic lows. While that’s good for the economy, it’s a sign that inflation persists.
Chipmaker Micron Technology fell 3.7% after warning investors that revenue could fall short of forecasts because of weakening demand. That warning hit other chipmakers hard, with Nvidia shedding 4%.
Norwegian Cruise Line plunged 10.6% for the biggest drop in the S&P 500 after reporting disappointing financial results and giving investors a weak revenue forecast. The weak results weighed down travel-related stocks. Expedia fell 1.6% and American Airlines fell 2.7%.
As the earnings season winds down, Disney, Wendy’s and Wynn Resorts will be reporting quarterly results this week.
Also on Tuesday, audience rating company Nielsen surged 21.2% after it announced progress on a deal to be acquired by private equity firms.
Bond yields rose. The yield on the 10-year Treasury rose to 2.79% from 2.75% late Monday.