After an initial dip, stocks have made a slight recovery during Tuesday's trading session, with significant fluctuations among the major averages. The Dow has shifted into positive territory, currently up by 144.12 points or 0.4%, settling at 38,934.55. However, the S&P 500 and the Nasdaq are experiencing minor losses, falling by 5.39 points and 78.28 points respectively.
The downturn for Nasdaq is largely attributable to shifting trends in technology stocks, which had boosted the market on Monday. Nvidia shares dropped by 2.3% following Monday's first-ever GTC Conference, where the chipmaker presented its latest AI chips, known as Blackwell.
Shares in Super Micro Computer also took a hit, dropping by 12.1% after announcing plans for a public offering of 2 million of its common stock.
Wall Street is exercising caution ahead of Wednesday's Federal Reserve monetary policy announcement. Though it's expected that interest rates will remain unchanged, the potential impact of the Fed's economic forecast could significantly influence the outlook for rates. Recent inflation rates, which have exceeded expectations, have dampened enthusiasm for a potential interest rate cut in June.
On a brighter note, the U.S. Commerce Department reported a strong rebound in new U.S. residential construction for February, revealing a significant 10.7% increase to an annual rate of 1.521 million. This comes after a 12.3% decrease to a revised rate of 1.374 million in January, and considerably outperforms economists' expectations of a 7.1% increase.
Building permits, indicative of future housing demand, rose by 1.9% to an annual rate of 1.518 million in February following a minor decrease in January.
Sector news highlights a slump in the semiconductor sector, most notably due to Nvidia's downturn, resulting in a 2.2% fall of the Philadelphia Semiconductor Index. The NYSE Arca Computer Hardware Index has also been negatively affected, largely due to the noteworthy drop in SuperMicro shares, resulting in a 1.5% decrease.
However, oil service stocks have shown positive movement in line with the rise in crude oil prices, causing a 1.1% increase in the Philadelphia Oil Service Index.
In terms of global markets, Asian Pacific stock markets reported mixed results on Tuesday, with Japan's Nikkei 225 Index rising by 0.7%, while China's Shanghai Composite Index fell by 0.7%. European markets are also displaying mixed results, with France's CAC 40 Index up by 0.4%, while indexes in the U.K. and Germany are down by 0.1%.
In the bond market, treasuries have begun to recover, following a downward trend over recent sessions. Consequently, the benchmark ten-year note yield, which moves inversely to its price, has fallen by 3.4 basis points and is currently at 4.306%.
