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Wall Street closed lower on Tuesday, dragged down by energy stocks. The volatile oil market became a bigger cause for concern as reports emerged that a few countries were contemplating suspending Russia from the OPEC production deal.
Hawkish comments coming in from the Fed about indefinite half percentage point hikes also dented investor confidence. All three major stock indexes ended in the red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.7% or 222.84 points to close at 32,990.12. Twenty components of the 30-stock index ended in the red, one remained unchanged, while nine ended in the green.
The tech-heavy Nasdaq Composite finished at 12,081.39, dipping 0.4% or 49.74 points.
The S&P 500 lost 0.6% or 26.09 points to close at 4,132.15. Ten out of 11 broad sectors of the benchmark index closed in the red. The Materials Select Sector SPDR (XLB), the Energy Select Sector SPDR (XLE) and the Utilities Select Sector SPDR (XLU) dropped 1.5%, 1.5% and 1.4%, respectively, while the Consumer Discretionary Select Sector SPDR (XLY) advanced 0.5%.
The fear-gauge CBOE Volatility Index (VIX) was down 1.3% to 26.19. A total of 15.52 billion shares were traded Tuesday, higher than the last 20-session average of 13.25 billion. Decliners outnumbered advancers on the NYSE by a 1.82-to-1 ratio. On Nasdaq, a 1.44-to-1 ratio favored declining issues.
Markets Weary About Fed Governor’s Comments
Wall Street has been extremely volatile in recent months due to soaring inflation, tightening monetary policies by the Fed and the resultant fear of the economy going into recession. However, last week saw the markets end a decades-long losing streak, primarily boosted by the May FOMC minutes, which showed that the Fed was planning to ease off on their tightening of the economy. This confidence took a hit on Tuesday as Fed Governor Christopher Waller said that the central bank should be raising interest rates by half percentage points at every meeting going forward or “until inflation is decisively curbed.”
It lends an indefinite timeline to the Fed tightening of monetary policies if these were to be indeed implemented. The hawkish nature of the Fed was back into the focus, dragging the market down with it. The meeting between Fed Chairman Jerome Powell and President Biden that took place on Tuesday kept investors interested for the future outlook.
Russia Situation Weighing Heavy On Energy Sector
The energy sector, led by oil prices, went down on Tuesday after reports emerged that some producers were exploring the idea of suspending Russia from the OPEC+ production deal. Without any definite plan of how the shortfall might be addressed, if Russia indeed were to be suspended, sentiment about the sector became negative and dragged the broader market down with it. Brent crude settled down 1.7% to reach $115.60/barrel, and U.S crude went down 0.4% to finish at $114.67/barrel.
Consumer Confidence, as reported by the Conference Board, declined slightly in May to close at 106.4. The April numbers were revised to 108.6 from the previously reported 107.3.
The Chicago PMI came in at 60.3 for May, up from 58.5 in April. Consensus for May was 58. The April numbers were revised from an earlier reported 56.4.
The S&P DJI released the Case-Shiller Home Prices Indices for March 2022, and the U.S national numbers came in at a 2.6% increase from February before seasonal adjustments. The 10-city and 20-city composites reported growth of 2.8% and 3.1%, respectively. Year over year, the national numbers grew 20.6% from March of 2021.
Monthly Roundup
May was a volatile month for Wall Street. The Dow and the S&P 500 remained relatively unchanged, having dropped 0.2% and 0.6%, respectively, but the Nasdaq Composite plummeted 3.6%, dragged down by tech stocks. The numbers could have been far worse if the indexes did not have a winning week closing on May 27. The S&P 500 was hovering around bear-market territory around mid-May, before the late-in-the-month stock rally pushed it up into clearer waters.
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Stock Market News for June 1, 2022
Wall Street closed lower on Tuesday, dragged down by energy stocks. The volatile oil market became a bigger cause for concern as reports emerged that a few countries were contemplating suspending Russia from the OPEC production deal.
Hawkish comments coming in from the Fed about indefinite half percentage point hikes also dented investor confidence. All three major stock indexes ended in the red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.7% or 222.84 points to close at 32,990.12. Twenty components of the 30-stock index ended in the red, one remained unchanged, while nine ended in the green.
The tech-heavy Nasdaq Composite finished at 12,081.39, dipping 0.4% or 49.74 points.
The S&P 500 lost 0.6% or 26.09 points to close at 4,132.15. Ten out of 11 broad sectors of the benchmark index closed in the red. The Materials Select Sector SPDR (XLB), the Energy Select Sector SPDR (XLE) and the Utilities Select Sector SPDR (XLU) dropped 1.5%, 1.5% and 1.4%, respectively, while the Consumer Discretionary Select Sector SPDR (XLY) advanced 0.5%.
The fear-gauge CBOE Volatility Index (VIX) was down 1.3% to 26.19. A total of 15.52 billion shares were traded Tuesday, higher than the last 20-session average of 13.25 billion. Decliners outnumbered advancers on the NYSE by a 1.82-to-1 ratio. On Nasdaq, a 1.44-to-1 ratio favored declining issues.
Markets Weary About Fed Governor’s Comments
Wall Street has been extremely volatile in recent months due to soaring inflation, tightening monetary policies by the Fed and the resultant fear of the economy going into recession. However, last week saw the markets end a decades-long losing streak, primarily boosted by the May FOMC minutes, which showed that the Fed was planning to ease off on their tightening of the economy. This confidence took a hit on Tuesday as Fed Governor Christopher Waller said that the central bank should be raising interest rates by half percentage points at every meeting going forward or “until inflation is decisively curbed.”
It lends an indefinite timeline to the Fed tightening of monetary policies if these were to be indeed implemented. The hawkish nature of the Fed was back into the focus, dragging the market down with it. The meeting between Fed Chairman Jerome Powell and President Biden that took place on Tuesday kept investors interested for the future outlook.
Russia Situation Weighing Heavy On Energy Sector
The energy sector, led by oil prices, went down on Tuesday after reports emerged that some producers were exploring the idea of suspending Russia from the OPEC+ production deal. Without any definite plan of how the shortfall might be addressed, if Russia indeed were to be suspended, sentiment about the sector became negative and dragged the broader market down with it. Brent crude settled down 1.7% to reach $115.60/barrel, and U.S crude went down 0.4% to finish at $114.67/barrel.
Consequently, shares of Chevron Corporation (CVX - Free Report) and Schlumberger Limited (SLB - Free Report) dipped 2% and 4.7%, respectively. Chevron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Consumer Confidence, as reported by the Conference Board, declined slightly in May to close at 106.4. The April numbers were revised to 108.6 from the previously reported 107.3.
The Chicago PMI came in at 60.3 for May, up from 58.5 in April. Consensus for May was 58. The April numbers were revised from an earlier reported 56.4.
The S&P DJI released the Case-Shiller Home Prices Indices for March 2022, and the U.S national numbers came in at a 2.6% increase from February before seasonal adjustments. The 10-city and 20-city composites reported growth of 2.8% and 3.1%, respectively. Year over year, the national numbers grew 20.6% from March of 2021.
Monthly Roundup
May was a volatile month for Wall Street. The Dow and the S&P 500 remained relatively unchanged, having dropped 0.2% and 0.6%, respectively, but the Nasdaq Composite plummeted 3.6%, dragged down by tech stocks. The numbers could have been far worse if the indexes did not have a winning week closing on May 27. The S&P 500 was hovering around bear-market territory around mid-May, before the late-in-the-month stock rally pushed it up into clearer waters.