Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 14, 2024.Â
Brendan McDermid | Reuters
The Dow Jones Industrial Average declined over 100 points Tuesday as the market rally took another breather, with investors looking ahead to key inflation data slated for release later this week.
The Dow fell 103 points, or 0.3%. The S&P 500 inched up 0.1%, while the Nasdaq Composite added 0.4%.
Retail giant Macy’s advanced more than 3% after announcing it would close around 150 of its struggling stores following a revenue miss in the prior quarter. Lowe’s gained 1.6% after posting an earnings beat. Zoom Video and Hims & Hers Health rose 7.3% and 33.5%, respectively, following earnings reports that exceeded Wall Street expectations.
The market on Tuesday “really doesn’t have a lot of direction,” according to Sam Stovall, chief investment strategist at CFRA Research. Different sectors “are each marching to the beat of the drummer,” he added.
Those moves follow a losing day on Wall Street that pulled the Dow and S&P 500 off record highs seen last week after Nvidia’s stellar earnings report.
“What’s causing tech, consumer discretionary, communication services and financial stocks to do better is that they tend to do well in a interest rate pause period. Also, that’s where the growth is,” Stovall said. “And so I think until the Fed starts to cut interest rates, investors are not going to dramatically diversify into mid- and small-cap stocks â they really want to wait and see.”
Data from the U.S. Department of Commerce released on Tuesday showed that orders for long-lasting goods declined more than expected in January, with the leading factor being a large drop in demand for transportation.
The latest consumer confidence numbers also fell on worries regarding a potential labor market slowdown and polarized political landscape, according to a Conference Board gauge released Tuesday. The board’s Consumer Confidence Index declined to to 106.7, which was lower than the downwardly revised 110.9 in January and below the Dow Jones estimate for 115.1.
Those come before January’s reading of the closely watched personal consumption expenditure price index, as well as data on personal income, slated for release on Thursday. Investors will watch these releases for future clues into the health of the economy and for insights into the path of monetary policy.
Stovall is estimating a month-over-month increase in both core and headline inflation, but a yearly decline in Thursday’s report.
“It’s almost like watching a ping pong ball drop on a table,” Stovall said.
