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S&P 500 dips after recent recovery rally

recovery rally

recovery rally

U.S. stock futures edged down early Tuesday following two consecutive winning sessions that offered a reprieve from the market’s recent sell-off. The Dow fell 109 points, or 0.3%, while the S&P 500 dipped 0.3%, and the Nasdaq lost 0.4%. This movement follows a turn on Wall Street after some soft economic data and President Donald Trump’s on-again-off-again tariff policy left investors wary of the U.S.’ financial health.

Last week, the market dipped into correction territory, but the index has made up notable ground in recovery rallies seen in Friday’s and Monday’s sessions. Despite the recent bounce, the tech-heavy indices still sit in correction territory, a term used to describe an index falling at least 10% from a recent high. The three major averages remain down on the year, underscoring the strength of the market’s pullback.

Investors continue to follow updates out of the White House and will turn their attention to the two-day policy meeting that kicks off Tuesday.

S&P 500 dips amid economic uncertainty

Traders will closely follow Wednesday afternoon’s interest rate announcement and subsequent press conference with Fed Chair Jerome Powell.

Fed funds futures are pricing in a likely scenario where the central bank holds rates steady, according to CME’s FedWatch tool. “We had two distinct stages to what was the fifth fastest correction since World War II: The first one was a good old growth scare, then we had pretty nasty technicals,” said Mohamed El-Erian, chief economic advisor at Allianz. “Most of the bad technicals are behind us.

So the two questions going forward are: Will the growth scare be contained? And will the hope in the Fed put prove realistic or not?”

Before Wednesday’s rate policy announcement, investors will monitor economic data on imports, housing, building, and production due Tuesday morning. No major earnings reports are expected on Tuesday.

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