Stocks fell modestly on Wall Street on Tuesday, as steadying Treasury yields helped calm the market after its worst drop in months.
After alternating between small gains and losses throughout the day, the S&P 500 fell 9.26 points, or 0.2%, to 4,128.73. The decline follows Monday’s sharp 2.1% drop, which came on the heels of the index’s first losing week in the last five.
The Dow Jones Industrial Average fell 154.02 points, or 0.5%, to 32,909.59, while the Nasdaq Composite fell 0.27 points, or less than 0.1%, to 12381.30. Stocks of smaller companies held up better than the rest of the market, and the Russell 2000 index ticked up by 0.2%.
Volatility has returned to Wall Street following what had been a strong summer as worries rise about how aggressively the Federal Reserve will raise interest rates to knock down high inflation. Recent comments from some Fed officials have cooled hopes the Fed may end up less forceful than feared.
The yield on the 10-year Treasury has climbed back above 3%, for example, after starting the month close to 2.60%.
Yields calmed on Tuesday, though, which helped give stocks something of a reprieve. The two-year yield fell in particular following some weaker-than-forecast readings on the economy, down to 3.28% from 3.33% late Monday.
The 10-year yield inched up to 3.05% from 3.03% after preliminary data suggested both the manufacturing and services sectors are weaker than economists expected.
The next big event circled on Wall Street’s calendar is a speech on Friday by Jerome Powell, the chair of the Federal Reserve. He’ll be speaking at an annual symposium held by the Fed in Jackson Hole, Wyoming, which has been the site of major market-moving speeches in the past.
Several profit reports also drove trading as the earnings season draws to a close. More than 95% of companies in the S&P 500 have reported their earnings for the spring, with overall growth on track for roughly 6%, according to FactSet.
Macy’s rose 3.8% after beating Wall Street’s second-quarter expectations, and J.M. Smucker gained 3.3% after delivering a sweetened financial forecast despite inflation eating into its results. Zoom Video Communications slumped 16.5% after cutting its financial forecast for the year.
Twitter fell 7.3% after a whistleblower alleged the company misled regulators about its cybersecurity defences, privacy protections and its ability to detect and root out fake accounts. The social media company is in the middle of trying to force Tesla CEO Elon Musk to consummate his $44 billion takeover offer for it.