US stocks slide from record highs amid concerns around the economic impact of rising COVID-19 cases
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- US stocks slipped from record highs as investors grow more concerned about the surge in Delta variant cases.
- Still, major indexes notched monthly gains, with the S&P 500 up for the seventh consecutive month.
- "Stocks can't go up forever," a strategist said. "This reinforces our belief that in the event of a well-deserved pullback."
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US stocks slipped from record highs Tuesday as investors grow concerned about the economic impact of rising COVID-19 cases.
Consumer confidence data released on Tuesday fell to a six-month low, indicating that Americans have been less inclined to purchase big-ticket items. US consumers however were more willing to spend on travel and hospitality as lockdown restrictions ease.
The headline consumer confidence index fell to 113.8, worse than the 123 consensus estimate and downwardly revised 125.1 prior reading. Edward Moya, senior market analyst at OANDA, said the reading "should add to the worry that we are seeing the peak with the US consumer."
Labor market data, meanwhile, is due out Friday. Deutsche Bank's US economists expect the pace of hiring to slow after a strong July report.
Still, all three indexes notched gains for the month, with the benchmark S&P 500 ending higher for the seventh consecutive month - its longest winning streak since January 2018.
Here's where US indexes stood at the 4:00 p.m. ET close on Tuesday:
- S&P 500: 4,522.57, down 0.14%
- Dow Jones industrial average: 35,359.08, down 0.12% (40.76 points)
- Nasdaq composite: 15,259.24, down 0.04%
Despite Tuesday's downturn, US stocks have responded with optimism since Federal Reserve Chairman Jerome Powell last week signaled that tapering asset purchases and easing bond-buying could happen this year, but interest rates would remain low until 2023.
"Stocks can't go up forever," Ryan Detrick, LPL Financial chief market strategist, said in a note. "This reinforces our belief that in the event of a well-deserved pullback, it would be an opportunity to buy at cheaper prices."
With a highly anticipated Federal Open Market Committee meeting next month, on top of the surging COVID-19 cases, investors should be on the lookout for some seasonal volatility in September, which is historically the worst month of the year for stocks, Detrick said.
"We remain in the camp that any weakness, should it occur, could be short-term and likely be contained in the 5-8% range," he added. "This bull market is alive and well and we would view any potential weakness as an opportunity."
Zoom plunged as much as 17% in early trading after the company forecast that its revenue will roughly flatline for the rest of the year.
Globalstar fell as much as 14% after Bloomberg reported that its satellite connection technology would not be included in Apple's upcoming iPhone 13.
Allbirds, the direct-to-consumer sneaker company focused on sustainability, made the first steps necessary to go public on Tuesday with its S-1 filing with the SEC.
In the digital asset space, FTX.US, the American arm of crypto exchange FTX, announced it had acquired derivatives dealer LedgerX as FTX CEO Sam Bankman-Fried pushes crypto to embrace regulation.
The CEO of eToro, Yoni Assia, broke down the four factors the exchange looks at from customer interest to token liquidity. Meanwhile, the number of crypto breaches and fraud is on track to break records in 2021, a study by Crypto Head showed.
The 10-Year US Treasury yield edged up to 1.305%, from 1.284% in the previous session. Yields move inversely to prices.
West Texas Intermediate crude slipped 1.07%, to $68.47. Brent crude, oil's international benchmark, slid 0.57%, to $72.99 per barrel.
Gold slightly fell 0.19% to $1,815.19 per ounce.
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