Highlights
Stocks slipped Tuesday as the market corrected lower after setting record highs on Monday and as investors reacted to an array of provocative statements from President Trump. The Dow Jones industrial average lost 0.8 percent, the S&P 500 eased by 0.2 percent and the Nasdaq was off 0.1 percent. US Treasury yields declined while the dollar and oil prices rose.
Somewhat better than expected consumer price figures pushed down bond yields which gave risk assets a lift in early going. On the negative side, bellicose-sounding comments from Trump directed at Iran's leaders lifted oil prices and dampened risk appetite. Risk assets also reacted poorly as Trump renewed his attacks on Federal Reserve Chair Jerome Powell, calling him a jerk who would be gone soon.
JP Morgan and bank stocks suffered after Trump repeated his call for caps on credit card interest rates. Microsoft declined after Trump said it would take steps to reduce electricity use at its data centers as part of an effort to lower utilities bills. Among sectors, rotation resumed out of technology shares which are seen as overvalued into cyclicals and value stocks. Megacaps were mixed with Google strong on the AI trade and Microsoft and Meta lagging.
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.