Major stock indexes experienced a significant decline in morning trading on Tuesday, with the markets anticipating a key inflation report. Tesla shares rose as investors considered important developments at the electric car company, while Nvidia suffered a decline despite positive views from analysts on its sales in China.
The Dow Jones Industrial Average and the S&P 500 both dropped by 0.6%, while tech-heavy stocks on the Nasdaq fell by 0.4%. The Dow Jones index fell below its 50-day moving average, and the S&P 500 and Nasdaq dipped below their 21-day moving averages. Among different sectors, communication services and real estate showed gains while industrials and financials experienced losses. Technology and consumer discretionary sectors only had modest gains.
Small cap stocks on the Russell 2000 rebounded and rose by 0.4% after experiencing volatility in recent sessions. Trading volume on both the New York Stock Exchange and Nasdaq was lower compared to the same time on Monday. The Innovator IBD 50 exchange traded fund lagged and fell by 0.4% while the benchmark 10-year Treasury yield declined by 4 basis points to 4.38%.
Tesla saw an increase of 3% after CEO Elon Musk announced the unveiling of the company’s robotaxi on August 8. However, analysts are cautious about this development due to uncertainties regarding the autonomous car enabled with AI and the introduction of a low-priced vehicle. Nvidia saw a 1% decline despite reports that its China sales might exceed expectations.
No significant economic news was expected on Tuesday, but the Labor Department is set to release the Consumer Price Index report for March on Wednesday. Economists anticipate a rise in inflation to 3.5% annually, with core inflation expected to fall to 3.7%. IBD MarketSurge Growth 250 showed potential sector rotation with insurance and retail stocks showing strong gains.
The tech industry saw some positive movements with software and networking stocks in the Dow Jones index registering gains, while Google-parent Alphabet expanded its cloud-computing partnership with Palo Alto Networks. Some top gainers in various indices included MakeMyTrip and Permian Resources in the IBD 50.
Earnings reports from big banks like Wells Fargo, JPMorgan Chase, and Citigroup were expected later in the week. Market watchers were keeping an eye on potential market movements and developments.
