On Tuesday, stocks showed initial declines but managed to recover as the trading day progressed. Notably, the Nasdaq moved into positive territory after rebounding from its earlier lows.
The Nasdaq, while having retreated from its session highs, remains up 18.18 points, or 0.1%, currently sitting at 17,210.71. In contrast, the S&P 500 has decreased by 11.29 points or 0.2%, standing at 5,349.50. The Dow also saw a decline, down 189.97 points or 0.5%, at 38,678.07.
The initial downturn was attributed to traders capitalizing on Monday's modest gains that propelled the Nasdaq and S&P 500 to record closing highs. However, selling pressure eased soon after the market opened, with traders hesitant to make significant moves ahead of key economic events on Wednesday.
Wednesday's early trading is anticipated to be influenced by the Labor Department's report on consumer price inflation for May. Economists predict a 0.1% rise in consumer prices for May, following a 0.3% increase in April. Core consumer prices, which exclude volatile food and energy sectors, are also expected to rise by 0.3% for the second consecutive month.
The annual growth rate of consumer prices is projected to remain stable at 3.4%, while core consumer price growth is expected to decelerate to 3.5% in May from April's 3.6%. These figures could significantly impact expectations for interest rates ahead of the Federal Reserve's monetary policy statement later in the day.
Although the Fed is largely expected to maintain current interest rates, traders will closely scrutinize the accompanying statement and officials' latest economic and interest rate projections.
### Sector News
Despite the broader market's lackluster performance, banking stocks have experienced sharp declines, causing the KBW Bank Index to drop by 2.0%, reaching its lowest intraday level in nearly two months.
Gold stocks are also under pressure despite a rise in gold prices, with the NYSE Arca Gold Bugs Index decreasing by 1.5%. Furthermore, housing stocks are notably weak, as evidenced by a 1.4% drop in the Philadelphia Housing Sector Index.
Steel, brokerage, and airline stocks have also shown significant declines, while other major sectors have made more moderate moves.
### Other Markets
In international markets, the Asia-Pacific region delivered a mixed performance on Tuesday. Japan's Nikkei 225 Index advanced by 0.3%, whereas China's Shanghai Composite Index fell by 0.8%.
European markets have also faced declines; the French CAC 40 Index dropped by 1.2%, the U.K.'s FTSE 100 Index decreased by 0.9%, and Germany's DAX Index fell by 0.6%.
In the bond market, treasuries have regained some ground following declines over the past two sessions. Consequently, the yield on the benchmark ten-year note has decreased by 1.4 basis points, now standing at 4.455%.
