Stocks finished firmly lower Tuesday. The Dow retreated 799 points to 25,027. The S&P 500 slid 90 points to 2,700, falling below its 200-day moving average, a widely watched technical indicator. The Nasdaq Composite tumbled 283 points to 7,158.
The major averages declined as a perceived “risk-off” tone took hold of markets. The trade truce between the U.S. and China, which inspired a rally Monday, seemed less certain. Treasuries garnered attention as they strengthened along the curve. The yield spread between the 10- and 2-year notes fell to a fresh decade low as the 10-year note lost seven basis points to 2.91%. Meanwhile, New York Fed President John Williams reiterated that policymakers are justified in their plans to continue raising interest rates as the U.S. economy remains “in really good shape”. Elsewhere, Fed Chairman Jerome Powell’s testimony scheduled for tomorrow is cancelled due to a market holiday in honor of President George H.W. Bush.
Ten of 11 S&P 500 sectors ended the session more than 1.3% lower. Financials led the decline in sympathy of a flattening yield curve. Shares of Goldman Sachs fell 3.8% to $184.31. Industrials also underperformed as Caterpillar lost 6.9% to $129.32. Technology stocks also pressured the major averages with Apple down 4.4% to $176.69 after an analyst downgrade.
Breadth was negative on issues by 1:0 on the NYSE and by 8:1 on the Nasdaq. Composite NYSE Volume was more than 4.2 billion shares.
In commodities, WTI crude lost 0.2% to $52.87/barrel. COMEX gold was up 0.6% to $1,241.10/ounce amid a weaker dollar.