U.S. stock markets closed lower on Tuesday after a choppy session. Market participants remained concerned that a series of strong economic data will result into a sticky inflation rate. Consequently, the Fed will refrain form aggressively reducing the benchmark interest rate in 2025. Elevated yields on sovereign government bonds also dented investors’ confidence on risky assets like equities. All three major stock indexes ended in negative territory.
The Dow Jones Industrial Average (DJI) shed 0.4% or 178.20 points to close at 42,528.36 after a choppy session. At intraday high, the blue-chip index was up as much as 225 points. Notably, 15 components of the 30-stock index ended in negative territory while 15 in positive zone.
The major loser of the index was NVIDIA Corp. NVDA. The stock price of this global leader for generative artificial intelligence-based chips tanked 6.2%. NVIDIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite finished at 19,489.68, plummeting 1.9% or 375.30 points due to weak performance by technology behemoths. The S&P 500 slid 1.1% to finish at 5,909.03. Nine out of 11 broad sectors of the broad-market index ended in negative territory and two in positive zone.
The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) decreased 2%, 1.9% and 1.1%, respectively. On the other hand, the Energy Select Sector SPDR (XLE) increased 1%.
The fear-gauge CBOE Volatility Index (VIX) was up 11.1% to 17.82. A total of 20.45 billion shares were traded on Tuesday, higher than the last 20-session average of 12.52 billion. Decliners outnumbered decliners on the NYSE by a 2.14-to-1 ratio. On Nasdaq, a 2.14-to-1 ratio favored declining issues.
The Institute of Supply Management reported that the services PMI (purchasing managers’ index) for December came in at 54.1, beating the consensus estimate of 53.4. The metric for November was 52.1. Any reading above 50 indicates expansion for services activities. December marked the sixth consecutive months of expansion and 52 months of expansion out of the last 55 months.
The business activity index recorded at 58.2 in December compared with 53.7 in November. The new orders index recorded at 54.2 in December compared with 53.7 in November. The price index climbed to 64.4 in December compared with 58.2 in November. This indicates higher inflation going forward.