Highlights
Hawkish Federal Reserve comments and debt ceiling uncertainty undercut equities Tuesday. The S&P 500's failure to break above 4,200 was a negative for sentiment. The Dow industrials fell 0.7 percent, the S&P 500 lost 1.1 percent, and the Nasdaq was down 1.4 percent. US Treasury yields and the dollar declined while oil prices rose.
High-level talks on the debt ceiling continued Tuesday but lack of progress and the approach of the June 1 X-date hurt risk appetite. The market reacted badly to another batch of comments from Minneapolis Fed President Neel Kashkari and from St. Louis Fed President James Bullard. Kashkari, a voting member of the Federal Open Market Committee, pushed back for a second consecutive day on the view that the Fed's tightening cycle is complete.
Among sectors, materials had a bad day amid falling prices for industrial and precious metals. Health care, food & beverage, and insurance stocks lagged, along with staples retailers after disappointing quarterly results from BJ's Wholesale Club.
On the positive side, energy was the leader on rising oil prices. Regional banks had another good day. Cyclicals were mixed with airlines, autos, and truckers strong while homebuilders, chipmakers, and rails weakened.
High-level talks on the debt ceiling continued Tuesday but lack of progress and the approach of the June 1 X-date hurt risk appetite. The market reacted badly to another batch of comments from Minneapolis Fed President Neel Kashkari and from St. Louis Fed President James Bullard. Kashkari, a voting member of the Federal Open Market Committee, pushed back for a second consecutive day on the view that the Fed's tightening cycle is complete.
Among sectors, materials had a bad day amid falling prices for industrial and precious metals. Health care, food & beverage, and insurance stocks lagged, along with staples retailers after disappointing quarterly results from BJ's Wholesale Club.
On the positive side, energy was the leader on rising oil prices. Regional banks had another good day. Cyclicals were mixed with airlines, autos, and truckers strong while homebuilders, chipmakers, and rails weakened.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
