The risk sentiment has suffered a setback after Monday’s rally, as stocks on Wall Street face difficulties in generating fresh gains. Traders are now preparing for the Federal Reserve Open Market Committee meeting, which starts today and will reveal the rate decision and Powell’s remarks tomorrow.
NVIDIA Corp. (NASDAQ:NVDA) experienced a 2.2% drop following a report suggesting that the chipmaker may need to cancel advanced chip orders worth up to $5 billion for China due to new U.S. government restrictions.
In Tuesday’s trading, the S&P 500 increased by 0.2%, while both the Dow Jones Industrial Average and Nasdaq 100 remained flat. Small caps in the Russell 2000 jumped by 0.9%.
Analysts at LPL Financial believe that despite the challenges facing the economy, including rising rates and international conflicts, factors such as a strong job market, cooling inflation, the end of Fed rate hikes, stable interest rates, and growing corporate profits will help stocks overcome these worries and continue the young bull market.
In major US equity ETFs, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose by 0.1%, the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) remained flat, and the Invesco QQQ Trust (NASDAQ:QQQ) fell by 0.1%.
Among S&P 500’s sector ETFs, the Real Estate Select Sector SPDR Fund (NYSE:XLRE) outperformed with a 1.4% increase, while the Energy Select Sector SPDR Fund (NYSE:XLE) and the Health Care Select Sector SPDR Fund (NYSE:XLV) underperformed, both experiencing a 0.2% decline.
In the latest economic data, the S&P CoreLogic Case-Shiller 20-city home price index recorded a 2.2% year-on-year increase, beating expectations. The Federal House Finance Agency’s house price index also showed a month-on-month increase of 0.6% in August.
Stocks that reacted to their earnings include Pinterest, Inc. (NYSE:PINS), which rallied over 18%, and Wolfspeed, Inc. (NYSE:WOLF), Arista Networks, Inc. (NYSE:ANET), and Monolithic Power Systems, Inc. (NASDAQ:MPWR), which all saw increases. JetBlue Airways Corporation (NASDAQ:JBLU), Caterpillar, Inc. (NYSE:CAT), Pfizer Inc. (NYSE:PFE), and BP Plc. (NYSE:BP), however, experienced declines.
Crude oil fell by 0.7%, with WTI-grade crude trading at $81 per barrel. Treasury yields were slightly lower, with the 10-year yield down by 3 basis points and the 30-year yield down by 4 basis points. The dollar rose, while the euro fell. European equity indices had a positive session, and gold and silver prices dipped slightly.
