S&P 500 Falls After $8.6 Trillion Surge From Lows
Wall Street’s rally took a breather on Tuesday, with stocks falling as traders awaited fresh catalysts after a six-day run that put the S&P 500 up almost 20% from its April lows.
The US equity benchmark lost steam following an $8.6 trillion surge to around “overbought” levels. A slide in its most-influential group - big tech - weighed on trading, with Alphabet Inc. down 1.5% amid the company’s developer conference. Tesla Inc. was the only megacap gaining as Elon Musk said he’s committed to leading the electric-vehicle giant five years from now.
Long-term Treasury yields climbed as fractious US budget negotiations kept focus on the growth in deficit spending. President Donald Trump is growing frustrated with demands to significantly boost the cap on the state and local tax deduction, according to a senior administration official, signaling a deadlock as Republicans aim to quickly pass a giant tax-cut bill.
Despite the pullback in stocks, May is shaping up as surprisingly strong for the S&P 500. Markets have calmed after months of turmoil as hopes grow that a tariff blitz unleashed by Trump will be less severe than expected. Still, investors are scouring charts for clues on whether the advance can persist, with the gauge near levels that some technicians view as a sign of overheating.
“There is little question that the momentum in the equity market is quite strong. That said, the market is getting overbought near-term, so it could see a breather at any time,” said Matt Maley at Miller Tabak. “However, unless that breather turns out to be a serious reversal, a retest of those all-time highs soon is very possible.”
The S&P 500 fell 0.4%. The Nasdaq 100 slid 0.4%. The Dow Jones Industrial Average lost 0.3%.
The yield on 10-year Treasuries advanced three basis points to 4.48%. A dollar gauge slipped 0.2%.
Source : Bloomberg
