U.S. stocks retreated Tuesday, led by a selloff of momentum-driven technology shares, as investors look ahead to central-bank policy meetings and gauge developments on the U.S.-China trade front.
Apple Inc. was expected to be in the spotlight ahead of its annual launch of new model iPhones later in the day.
How are the major benchmarks faring?
The Dow Jones Industrial Average
fell 84 points, or 0.3%, at 26,748, while the S&P 500 index
lost 19 points, or 0.6%, to 2,959. The Nasdaq Composite index
lost 67 points, or 0.8%, to 8,020.
Stocks ended mostly lower in lackluster trade Monday, with the S&P 500 giving up just 0.28 point to end at 2,978.43, ending a three-day win streak. The Dow , however, ended with a gain of 38.05 points, or 0.1%, at 26,835.51, to extend its winning streak to four session. The Nasdaq Composite gave up 15.64 points, or 0.2%, to close at 8,087.44.
Stocks have been in rebound mode in September, however, after suffering their second losing month of 2019 in August. The S&P 500 is up 1.1% so far this month, while the Dow has gained 1.3% and he Nasdaq is up 0.7%.
What’s driving the market
Concerns about the U.S.-China trade battle appear to have moved to the back burner for investors after being blamed for volatile market action in August. U.S. Treasury Secretary Steven Mnuchin on Monday told Fox Business that he views renewed discussions with Beijing as a sign of good faith.
“The U.S. and China are due to meet next month, and according to Steven Mnuchin…the U.S. is prepared to do a deal, as long as it is good for the U.S.,” said David Madden, market analyst at CMC Markets UK, in a note. “The lack of hostilities between the U.S. and China is likely to keep stocks in their upward move.”
Investors were also watching a potential rotation from defensive sectors, including real estate, utilities and consumer staples into cyclical sectors, including financials, energy and industrials, which have posted positive gains Monday and early Tuesday, in contrast to the S&P 500.
Information technology shares were also under pressure Tuesday, down 1.4%, one day after the attorneys general of 50 U.S. states announced an investigation into Google’s ‘potential monopolistic behavior’ on Monday, underscoring regulatory concerns surrounding large tech firms.
Shares of Facebook Inc.
and Google parent Alphabet Inc.
all lost ground Tuesday amid a broader sell off momentum-driven growth stocks, as indicated by the 1.9% decline in the iShares Edge MSCI USA Momentum Factor exchange-traded fund
The European Central Bank is expected to deliver additional monetary stimulus when its policy makers meet Thursday, though some officials have appeared to push back against expectations for an aggressive package of measures combining further interest-rate cuts with a new bond-buying program.
The U.S. National Federation of Independent Business on Tuesday said its small-business optimism index fell 1.6 points to a seasonally adjusted 103.1 in August, its worst showing since March.
The rate at which Americans quit their jobs hit an all-time high in July, the Labor Department estimated Tuesday, suggesting that workers are confident in the strength of the job market. Job openings fell slightly during the month, while layoffs remained at low levels.
Which stocks are in focus?
Investors will be watching shares of Apple
as it holds an annual fall event to roll out new devices and offer more information about other elements of its business, including its fast-growing services segment. Apple is expected to introduce three upgraded iPhone models, as well as new price points, and launch timing for new gaming and video subscriptions it showed off in a spring event.
Shares of Ford Motor Co.
were down 4.5% in premarket action. Credit rating agency Moody’s Investors Service late Monday downgraded the auto maker’s debt rating to Ba1, the first rung of “junk,” or non-investment speculative grade, from Baa3, citing “considerable operating and market challenges” and predicted “weak earnings and cash generation likely as the company pursues a lengthy and costly restructuring plan.” S&P Global Ratings and Fitch Ratings have a BBB rating on Ford, which is two steps above junk, though have a negative outlook. As long as the company has two ratings above junk, it is eligible to stay in the biggest investment-grade bond indexes.
Shares of HD Supply Holdings Inc.
were down 4.8% in premarket action after the industrial distribution company reported a fiscal second-quarter profit that topped expectations but sales that missed, while also providing a downbeat outlook for the current quarter.
Shares in fast food retailer Wendy’s
were down 12% after announcing a $20 million plan to serve breakfast nationwide from 2020.
How are other markets trading?
The yield on the 10-year U.S. Treasury note
rose to 1.65%.
Stocks traded mixed in Asia overnight, with the China CSI 300
falling 0.3%, Hong Kong’s Hang Seng index
nearly unchanged and Japan’s Nikkei 225
rising 0.4%. In Europe, stocks edged higher, with the Stoxx Europe