U.S.stocks on Tuesday seesawed, as investors took a bit of a breather on a relatively light news day with little on the economic data front.Wall Street’s three major averages opened with marginal losses and have since fluctuated, with the Dow ( DJI ) lagging behind the other two indices.By afternoon, the blue-chip index was down 0.19% to 33,498.93 points.The tech-heavy Nasdaq Composite ( COMP.IND ) was up 0.03% to 13,233.54 points, with gains capped by continued weakness in shares of Apple ( AAPL ) as investors digested the implications of the iPhone-maker’s highly priced new mixed-reality headset.The S&P 500 ( SP500 ) was lower by 0.04% to 4,280.45 points.
The benchmark index retreated further from a key level at 4,292.44 points.If it rises above that level, it would mark a more than 20% gain from its October 2022 closing low and an exit from its longest bear-market run since 1948.
“Markets certainly stopped chasing and squeezing yesterday, in part thanks to a weak ISM services print that helped to ramp up fears about a recession,” Deutsche Bank’s Jim Reid said.”Earlier in the day it had looked rather different, and at one point the S&P 500 ( SP500 ) was even on track to close in bull market territory, having risen by over 20% since its closing low last October.But the negative data surprise ultimately dominated, and that led to a decent risk-off move that meant the index fell short of that milestone by the close.” On Tuesday, eight of the 11 S&P sectors were trading in the green, led by an outsized +1% gain in Financials on the back of strength in regional bank stocks.The SPDR Regional Bank ETF ( KRE ) and the Invesco KBW Regional Bank ETF ( KBWR ) added more than 5% each, while Zions Bancorporation ( ZION ) and Comerica ( CMA ) were among the top S&P 500 ( SP500 ) percentage gainers.Meanwhile, cryptocurrencies were in focus after the U.S.Securities and Exchange Commission (SEC) sued crypto exchange Coinbase ( COIN ), which tumbled more than 13%.Bitcoin ( BTC-USD ) and ethereum ( ETH-USD ) had both reversed course and were now higher.The economic calendar was empty, and the Federal Reserve is in its blackout period ahead of its monetary policy committee meeting from June 13 to 14.
According to the CME FedWatch tool, markets are seeing a solid ~79% chance of no rate hike next week, followed by a nearly 53% probability of a 25 basis point bump in July.”With our expectation that the May core CPI data looks strong, in light of Friday’s robust gain in nonfarm payroll employment, and given our expectation that the FOMC participants’ assumption of appropriate policy revises up at the June FOMC meeting, we expect the FOMC raises the target range for the federal funds rate by 25 bps at the July FOMC meeting,” UBS’ Jonathan Pingle said on Monday.”We do not expect a rate hike at the June meeting, consistent with how we view the recent FOMC communications.That implies the July FOMC meeting rate hike would leave the target range for the federal funds rate at 5.25% to 5.50%.
Yes, we think the FOMC skips June and raises rates in July,” Pingle added.Treasury yields were slightly higher on Tuesday.The longer-end 10-year yield ( US10Y ) was up 1 basis point to 3.70% while the more rate-sensitive 2-year yield ( US2Y ) was up 4 basis points to 4.52%.The dollar index ( DXY ) was up 0.18% to 104.19.
Turning to active stocks, chipmakers were in focus after reports that Taiwan Semiconductor Manufacturing ( TSM ) revised its annual capital spending outlook.Advanced Micro Devices ( AMD ) and Intel ( INTC ) both advanced more than 3% each and were among the top percentage gainers on the Nasdaq Composite ( COMP.IND ).Conversely, Broadcom ( AVGO ) fell more than 3%..