Highlights
Stock indexes were slightly weaker in ranges on Tuesday on a relatively quiet day ahead of Wednesday's US consumer price report. The Dow Jones industrial average and the Nasdaq both eased 0.2 percent while the S&P 500 was flat. Bond yields and the dollar declined while WTI oil prices rose.
Stocks were undercut by another day of weakness in the AI trade after a selloff in the KOSPI overnight and negative comments about AI stock excesses from a Broadcom executive. Bank earnings started off the earnings season mixed but mostly negative to weigh on financials. Other lagging sectors included pharma/biotech, airlines, chain stores, and aerospace & defense. Holding up best were select big tech stocks including Meta, plus homebuilders, restaurant chains, media and telecom.
On the positive side were dovish-sounding comments from Federal Reserve officials including Fed Governor Christopher Waller’s remark that rising market yields were doing some of the Fed’s work for it, and New York Fed President John Williams’ comment in an interview with Bloomberg that he did not yet see a need for rate increases in 2027 after one more rate hike in 2026. Williams said his view is data-dependent.