Wall Street experienced a rollercoaster of a day on Tuesday, with the market recovering from its session low to trade mixed. A surge in Apple (AAPL) helped counter a slump in financial stocks, keeping investors on their toes. Market participants are also treading cautiously, as they await two major events scheduled for the next day – the release of consumer inflation data for May and the Federal Reserve’s latest monetary policy rate decision.
The Dow slipped 0.53% to 38,662.87 points in morning trade, dragged down by financial components American Express (AXP) and JPMorgan (JPM). Meanwhile, the S&P 500 retreated from a record close in the previous session, down 0.17% to 5,351.89 points.
On the other hand, the tech-heavy Nasdaq Composite reversed course and was up 0.17% to 17,221.61 points, thanks to Apple’s impressive performance. The tech giant’s stock reached an intraday peak for the first time since December last year, following positive feedback on its artificial intelligence offerings at its annual developers conference.
With nine out of the 11 S&P sectors in the red, Financials took a hit, dropping more than 1%. The focus remains on the Federal Reserve, which is expected to maintain interest rates on Wednesday when it issues its decision at 1400 ET. Wall Street will also be closely watching the Fed’s updated dot plot and Summary of Economic Projections.
Labor market data from last week showed a trend that aligns with the Fed’s goals, leading to slight increases in rate cut expectations. However, the markets are still uncertain about the Fed’s next move, with some anticipating a pivot towards a more accommodative stance.
Ahead of the Fed decision, markets will receive the consumer price index (CPI) report for May, with core CPI expected to rise 0.3% M/M. The Fed’s catch-22 situation of needing more evidence before making a decision is causing some unease among investors.
In the fixed-income markets, U.S. Treasury yields were lower on Tuesday, with the 30-year yield down 2 basis points to 4.58%, the 10-year yield down 1 basis point to 4.45%, and the 2-year yield down 2 basis points to 4.87%.
Among other active stocks, General Motors (GM) stood out as a top percentage gainer on the S&P 500, as the carmaker’s board approved a new $6B stock buyback program. As Wall Street braces for the upcoming events, the market remains volatile, with investors eagerly awaiting the Fed’s decision and the latest economic data.
