NEW YORK (AP) — Stocks posted modest losses in a quiet Tuesday on Wall Street, as stabilizing Treasury yields helped calm the market after its worst fall in months.
The S&P 500 fell 9.26 points, or 0.2%, to 4,128.73 after toggling between small gains and losses throughout the day. The slight decline follows Monday’s sharp 2.1% decline, which followed the index’s first losing week in the past five.
The Dow Jones Industrial Average fell 154.02, or 0.5%, to 32,909.59, and the Nasdaq composite slipped 0.27, or less than 0.1%, to 12,381.30. Small company stocks held up better than the rest of the market and the Russell 2000 Index rose 0.2%.
Volatility has returned to Wall Street after what had been a strong summer as concerns grow over how aggressively the Federal Reserve will raise interest rates to bring down high inflation. Recent comments from some Fed officials have dampened hopes that the Fed could end up being less aggressive than expected.
The yield on the 10-year Treasury, for example, rose back above 3% after starting the month close to 2.60%.
Yields cooled off on Tuesday, however, which helped give stocks a break. The two-year yield fell particularly after weaker than expected readings on the economy, falling to 3.28% from 3.33% late Monday.
The 10-year yield fell to 3.05% from 3.03% after preliminary data suggested the manufacturing and services sectors were weaker than economists expected.
“Clouds rolled in across the private sector as new services orders slipped back into contractionary territory, reflecting subdued demand conditions seen among their manufacturing counterparts,” said S&P Global Market Intelligence’s senior economist, Siân Jones, in a press release accompanying the report.
A separate report showed new home sales slowed more than economists expected last month. The housing sector has been one of the hardest hit by the rise in interest rates this year. As the Fed raised its overnight rate, mortgage rates also climbed and cooled the industry.
Such weak data on the US economy raises fears that a recession is indeed happening, but it could also encourage the Fed to ease rate hikes. Worries about a slowing economy are spreading across the world, and the value of one euro has fallen below $1 amid worries about Europe in particular.
The next big event circled on Wall Street’s calendar is a Friday speech by Jerome Powell, the chairman of the Federal Reserve. He will speak at an annual symposium hosted by the Fed in Jackson Hole, Wyoming, which has been the scene of major market speeches in the past.
In the stock market, losses by health care companies helped offset gains by energy producers driven by higher oil prices.
Several earnings reports also boosted trading as the earnings season draws to a close. More than 95% of S&P 500 companies have reported spring earnings, with overall growth on track at around 6%, according to FactSet.
Macy’s rose 3.8% after beating Wall Street expectations in the second quarter, and JM Smucker gained 3.3% after issuing a softened financial forecast despite inflation eating away at its results. Zoom Video Communications fell 16.5% after cutting its financial guidance for the year.
Twitter tumbled 7.3% after a whistleblower alleged the company misled regulators about its cybersecurity defenses, privacy protections and ability to detect and root out threats. fake accounts. The social media company is trying to force Tesla CEO Elon Musk to complete his $44 billion takeover bid.
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