S&P 500 falls for a second day because the benchmark struggles to hit a report
The S&P 500 fell a second day on Tuesday as the benchmark struggled to refresh its record.
The broad equity benchmark was 0.4% lower, 0.6% below its record high from last month. The Dow Jones Industrial Average lost 160 points, while the tech-heavy Nasdaq Composite was down 0.3%.
Tesla wiped out previous profits and fell more than 1% even after deliveries rose more than 1%. The electric automaker shipped 33,463 Chinese-made vehicles in this market in May, up 29% from April.
Boeing shares also rolled over and traded in negative territory. The stock previously rose after Southwest Airlines announced it would add nearly three dozen aircraft to its order for the smallest 737 Max model amid an improvement in travel demand.
The trading mania fueled by Reddit appeared to have spread to other stocks on Tuesday, notably Clover Health and Wendy’s. The healthcare startup grew up to 80% while the fast food chain’s shares rose 13%.
The US Securities and Exchange Commission said Monday it is monitoring the continued volatility in the market and pledging to protect retail investors.
On the data front, job vacancies rose to a new record high in April, with 9.3 million open positions amid the major economic recovery. The standard set in April was well above the 8.3 million in March, which itself was a new high since 2000 for the Department of Labor’s vacancy and turnover survey.
Several global websites went out of business early Tuesday, but the extent of the problem and its spread were unclear. Futures, especially those for the tech-heavy Nasdaq, appeared to give way as the news of the default spread, but quickly made up for most of those losses. It was unclear at the time whether the move was related to this.
Investors are waiting for new inflation signals later this week following Friday’s job report. While fewer jobs were created than expected in the US in May, the unemployment rate fell from 6.1% to 5.8% and the markets reacted positively to the results.
“The reflation trade is taking a back seat, although the Goldilocks ‘payroll report on Friday served to allay some concerns that the economy might be doing a little too well,” Goldman Sachs’ Chris Hussey said in a statement Monday. “Today’s market moves show that these concerns may persist.”
The consumer price index for May is due to be published on Thursday. According to the Dow Jones, economists expect the consumer price index to increase by 4.7% year-on-year. In April the CPI rose 4.2% on an annual basis, the fastest increase since 2008.
All eyes are on the next meeting of the Federal Open Market Committee, which is scheduled for May 15-16. June is slated as investors watch what Fed officials say about inflation and monetary policy. Recent comments from officials suggest the Fed is beginning to prepare markets to slow down its asset purchases.