Highlights
Bargain-hunting in megacaps, especially big technology stocks, helped the Nasdaw outperform Tuesday as many investors viewed recent declines as a short-lived technical correction. The Dow Jones industrial average lost 0.8 percent, the S&P 500 gained 0.4 percent, and the Nasdaq was up 1.3 percent. Bond yields edged up, the dollar declined, and oil prices dropped.
After three days of losses dropped it into correction territory, Nvidia rallied nearly 7 percent on Tuesday to lead the Magnificent Seven higher. Big tech growth stocks also got a boost as the bond market saw good bidding in the US Treasury 2-year note sale, the first leg of the week's slate of Treasury coupon auctions. Five-year and seven-year notes are on tap for Wednesday and Thursday, ahead of Friday's big personal consumption expenditures price index report.
Comments from Federal Reserve officials Tuesday generally repeated familiar points about data dependency and the need for confirmation inflation has been tamed before any rate cuts. Fed Governors Lisa Cook and Michelle Bowman did diverge somewhat, with Cook emphasizing downside risks to growth and employment while Bowman appeared resolutely hawkish. Economic indicators came in mixed with consumer confidence in line with expectations while Richmond Fed manufacturing missed to the downside.
Outperforming sectors included semiconductors, networking/communications, big pharma, cruise lines, and electric vehicles. Losses in Walmart and Target weighed on discount stores as they announced big sales to compete with Walmart. Other weak links included machinery, metals, bank, apparel, homebuilders and building materials.
After three days of losses dropped it into correction territory, Nvidia rallied nearly 7 percent on Tuesday to lead the Magnificent Seven higher. Big tech growth stocks also got a boost as the bond market saw good bidding in the US Treasury 2-year note sale, the first leg of the week's slate of Treasury coupon auctions. Five-year and seven-year notes are on tap for Wednesday and Thursday, ahead of Friday's big personal consumption expenditures price index report.
Comments from Federal Reserve officials Tuesday generally repeated familiar points about data dependency and the need for confirmation inflation has been tamed before any rate cuts. Fed Governors Lisa Cook and Michelle Bowman did diverge somewhat, with Cook emphasizing downside risks to growth and employment while Bowman appeared resolutely hawkish. Economic indicators came in mixed with consumer confidence in line with expectations while Richmond Fed manufacturing missed to the downside.
Outperforming sectors included semiconductors, networking/communications, big pharma, cruise lines, and electric vehicles. Losses in Walmart and Target weighed on discount stores as they announced big sales to compete with Walmart. Other weak links included machinery, metals, bank, apparel, homebuilders and building materials.
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.
