U.S. stocks fell on Tuesday, giving back some of the strong gains from the previous session.
The Dow Jones Industrial Average traded 0.4% lower. The S&P 500 slid 0.6% and the tech-heavy Nasdaq Composite dipped 1%. The S&P 500 rallied more than 2% Monday for its best day since June.
Shares of Target reversed early gains to trade more than 2% lower despite the company reporting booming sales. However, the retailer declined to provide a forecast for 2021.
The 10-year Treasury yield, a point of focus lately for equity investors, dipped to 1.43%. The benchmark rate started stabilizing this week after surging to its high of 1.6% last week, which eased investor fears about higher borrowing costs and inflation.
U.S. equities began March on a strong note on Monday with the S&P 500 up 2.38%, the Dow Jones Industrial Average adding 1.95% and the tech-heavy Nasdaq Composite jumping just over 3% after shedding 4.9% last week.
All 11 S&P sectors finished in the green and the S&P 500 posted its best day since June 5. Both the Dow and the Nasdaq clinched their best trading day since November.
Economically sensitive cyclical sectors like energy and financials continued to outperform the broader market amid optimism about vaccines and economic resurgence. Meanwhile, a pause in the market for U.S. debt allowed high-growth tech names to recoup a sizable portion of their recent losses. Facebook added 2.8%, Apple rose 5.4% and Tesla climbed 6.4%.
“Anxiety over yields appeared largely responsible for a 3% retreat in the S&P 500 from a record high in the middle of” February, Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note.
“We expect this interruption to the equity rally to be temporary and believe investors should put the pullback in context,” he added. “The rise in yields has been led by optimism over growth, not
inflation worries, and so doesn’t yet pose a threat to risk assets.”
Investors on Tuesday will pore over comments made by both Securities and Exchange Commission Chair nominee Gary Gensler and Federal Reserve Governor Lael Brainard.
Gensler will testify before the Senate Banking Committee at 10 a.m. ET while Brainard will deliver a speech entitled “U.S. Economic Outlook and Monetary Policy” via a virtual meeting hosted by the Council on Foreign Relations.
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