US stocks were lower on Tuesday, with the S&P 500 falling 0.4%, the Dow Jones declining about 130 points, and the Nasdaq losing 0.8%, after booking gains in the past two sessions.
US stocks resume decline on Tuesday
Investors remain cautious about the economic growth outlook and the potential impact of Trump's policies on the US economy, particularly regarding trade and fiscal measures. Meanwhile, the Federal Reserve's two-day FOMC meeting begins today, with traders eagerly awaiting updated economic projections and the Fed's policy outlook, set to be released tomorrow. Markets currently anticipate two rate cuts this year, with the probability of a third cut increasing as inflation continues to show signs of moderation while economic uncertainty persists.
Macro data suggest resilience in housing and manufacturing
On the data front, housing starts, building permits, and industrial production exceeded expectations, suggesting resilience in the housing and manufacturing sectors despite higher borrowing costs. Additionally, both import and export prices increased instead of declining as forecasted, raising concerns about inflationary pressures. Treasury yields inched lower, with the 10-year yield hovering around 4.3%, as investors reassessed the timing and magnitude of potential Fed rate cuts.
Tech stocks fall
On the corporate front, Alphabet shares fell 0.7% following reports that Google will acquire cloud security firm Wiz for $32 billion, one of the largest cybersecurity deals in history. Nvidia lost 2.4% as investors took profits ahead of CEO Jensen Huang’s keynote address at the company’s GAI conference, where he is expected to outline advancements in AI technology and the company’s strategic roadmap. Other chip stocks also saw declines, with AMD and Broadcom slipping over 1%. Meanwhile, energy stocks were mixed as oil prices fluctuated amid supply concerns and geopolitical tensions.
