On Tuesday, trading saw a strong decline in stocks, a significant drop from the mild losses recorded in the previous session. All major averages experienced a decrease, with Nasdaq, an index heavily concentrated in the technology sector, taking the biggest hit.
As of the moment, the major averages remain near their session lows. The Nasdaq index is down by 283.29 points or 1.8% at 15,924.22. The S&P 500 index has seen a reduction of 43.12 points or 0.8% at 5,087.83, and the Dow Jones Industrial Average is down 206.14 points or 0.5% at 38,783.69.
This prolonged downtrend in Wall Street comes in light of traders opting to profit from recent market strength, which previously saw the S&P 500 and Nasdaq reach record-setting highs last Friday.
Uncertainty regarding future interest rates likewise holds an influence on the market's current state, in anticipation of the upcoming congressional testimony by Federal Reserve Chair Jerome Powell.
Powell is set to deliver a testimony before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday, where it is expected that he will reiterate past statements emphasizing the need for the Federal Reserve to attain increased assurance of slowing inflation before adjusting interest rates.
The following monetary policy meeting is set for March 19-20, during which it is widely anticipated that the interest rates will remain unchanged.
In local economic news, a report issued by the Institute for Supply Management indicated a slightly higher than predicted decrease in American service sector growth for February. The index reading for service sector growth fell to 52.6 in February compared to 53.4 in January. Despite maintaining a growth indicator with a score above 50, economists had anticipated a slighter decrease to 53.0.
Significant movements have been observed in various sectors. Software stocks experienced a considerable decline, leading to a 3.2% drop in the Dow Jones U.S. Software Index. GitLab (GTLB) noted a significant decline of 17.3%, despite reporting better than expected fourth-quarter results, due to disappointing guidance.
A visible weakness is also observed in computer hardware stocks, causing a 2.5% drop in the NYSE Arca Computer Hardware Index. Additionally, noticeable reductions are present in the semiconductor, biotechnology, and networking sectors, contributing to Nasdaq's substantial decrease.
On the contrary, banking stocks are showing remarkable strength, and both utilities and gold stocks are on the rise.
Regarding international trade, most Asia-Pacific stock markets recorded a decrease during Tuesday's trading. Japan's Nikkei 225 Index closed nearly flat, while Hong Kong's Hang Seng Index saw a significant 2.6% decline. The major European markets also displayed modest downtrends, including slight falls in the French CAC 40, the German DAX and the UK's FTSE 100 indices.
Finally, the bond market saw a significant increase following the previous session's decline. Consequently, the yield on the benchmark ten-year note saw an 8.0 basis point decrease, landing at 4.139 percent.
