Wall Street ended a day of listless trading Tuesday by mostly edging up, narrowly avoiding a three-day losing streak for the Standard & Poor’s 500 index.
A last-minute burst of buying nudged the benchmark index into positive territory after it spent most of the day flat or down.
Stocks have wavered between small gains and losses after a run of record highs last week. Investors have been mostly pausing ahead of two days of congressional testimony by Federal Reserve Chairman Jerome H. Powell. Traders will be listening to the exchanges that Powell has with lawmakers Wednesday and Thursday for hints about the Fed’s next move on interest rates.
The market rallied through much of June after the central bank signaled that it is prepared to cut rates to offset slowing global growth and the fallout from U.S. trade conflicts. But an unexpectedly strong U.S. jobs report Friday has dimmed investors’ expectations.
Many traders still expect the Fed will cut its benchmark rate by a quarter of a percentage point at the end of the month, but fewer are now expecting a half-point reduction.
“Certainly the jobs report put into perspective just how much easing may be possible, given the continued strength of the economy,” said Justin Kelly, chief investment officer at Winslow Capital. “So the market is likely recalibrating.”
The S&P 500 edged up 3.68 points, or 0.1%, to 2,979.63. The Dow Jones industrial average slipped 22.65 points, or 0.1%, to 26,783.49.
The Nasdaq composite, which is heavily weighted with technology companies, rose 43.35 points, or 0.5%, to 8,141.73. The Russell 2000 index of smaller company stocks inched up 1.20 points, or 0.1%, to 1,562.59.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.07% from 2.03%.
Despite lingering worries over trade, investors have pushed stocks mostly higher since early June after the Fed raised expectations for an interest-rate cut. The benchmark S&P 500 hit all-time highs three straight days last week. Even with the sluggish start to this week, the S&P 500 is just 0.5% below the record high it set Wednesday.
While investors are focused on the Fed this week, traders may also be holding back ahead of next week, when the bulk of S&P 500 companies begin reporting their second-quarter results.
Expectations are generally low, and this could be the first time in three years that S&P 500 companies report a back-to-back decline in overall earnings, according to FactSet.
“This is the quiet before the storm, the storm in this case being earnings season,” Kelly said. “It’s going to be a mixed earnings season because we can all observe the weaker macroeconomic data, which is going to affect companies that are more dependent on a strong economy.”
Companies in the technology, healthcare and consumer discretionary sectors are likely to deliver stronger results, given that U.S. consumer spending and sentiment remain strong.
“You may be starting to see investors position for that, believing that earnings may be positive catalyst for the share prices in those growth sectors,” Kelly said.
Investors are in good shape heading into earnings season. The S&P 500 is up 18.9% this year so far and the Nasdaq has climbed 22.7%.
Technology and communications services stocks drove much of Tuesday’s gains in the market. Advanced Micro Devices climbed 3.5%. Twitter rose 3.3%.
Banks also notched solid gains, receiving a boost from rising bond yields, which drive up interest rates on mortgages and other loans. First Republic Bank shares rose 1.5%.
Higher mortgage rates spell bad news for would-be home buyers — they make home loans more expensive. That weighed on home builders’ stocks, which closed broadly lower. Hovnanian Enterprises led the slide, dropping 4.2%.
Consumer staples, materials and industrials stocks lagged behind the broader market. Monster Beverage fell 1.9%, Mosaic declined 3%, and 3M slid 2.1%.
Acacia Communications soared 35.1% after the company agreed to be acquired by Cisco Systems.
Energy futures closed broadly higher Tuesday. Benchmark crude oil rose 17 cents to $57.83 a barrel. Brent crude oil, the international standard, rose 5 cents to $64.16 a barrel. Wholesale gasoline rose 3 cents to $1.93 a gallon. Heating oil rose 1 cent to $1.91 a gallon. Natural gas rose 3 cents to $2.43 per 1,000 cubic feet.
Gold rose 50 cents to $1,397.50 an ounce. Silver rose 10 cents to $15.07 an ounce. Copper fell 4 cents to $2.62 a pound.