Stocks on Wall Street fell broadly Tuesday, with another slide in bond yields and a mixed batch of corporate earnings reports weighing on the market.
The selling pulled down every major sector, snapping a three-day winning streak for the Standard & Poor’s 500 index.
Financial stocks bore the brunt of the decline as investors reacted to lower yields. Technology stocks, which like banks have tended to lead the market’s gains recently, gave up an early gain.
Home Depot climbed after the home improvement retailer reported earnings that beat Wall Street’s forecasts. But two other big retailers didn’t fare as well. Kohl’s and TJX shares fell after those companies posted quarterly results that fell short of analysts’ expectations.
Stocks have been caught in the grip of volatile trading all month as anxious investors alternate between seeking shelter in bonds and pouncing on stocks when prices slump.
“The market is taking a little bit of a breather here,” said Tony Roth, chief investment officer at Wilmington Trust. “You’re getting just a little bit of consolidation after the rally we’ve had over the last three or four days.”
The S&P 500 fell 23.14 points, or 0.8%, to 2,900.51. The Dow Jones industrial average fell 173.35, or 0.7%, to 25,962.44. The Nasdaq, which is heavily weighted with technology stocks, fell 54.25, or 0.7%, to 7,948.56. The Russell 2000 index of smaller-company stocks fell 10.84 points, or 0.7%, to 1,498.01. All four indexes are on track to finish the month with losses.
Investors have been trying to parse conflicting signals on the U.S. economy and determine whether a recession is on the horizon. A key concern is that the escalating and costly U.S.-China trade war will hamper growth around the globe.
Uncertainty over trade clouded Home Depot’s otherwise strong quarterly report Tuesday. The retailer cut its sales expectations for the year, citing declining lumber prices and the potential impacts to the U.S. consumer arising from recently announced tariffs.
That didn’t scare off investors. Home Depot shares jumped 4.4%, the biggest gain in the S&P 500, as investors focused on the company’s solid quarterly results. Lowe’s rode its rival’s surge, finishing with a 3% gain.
Kohl’s, meanwhile, slid 6.9% — the biggest decliner in the S&P 500. The department store operator reported a sharper-than-expected decline in sales at established locations during the second quarter.
Bond yields declined. The yield on the 10-year Treasury slipped to 1.55% from 1.59%. That helped pull down financial stocks. Bank of America dropped 2%.
Although technology stocks lost ground overall, with Western Digital falling 1.9%, some chipmakers continued to rise on Monday’s news that the U.S. gave Chinese telecom giant Huawei an extension to buy more supplies from U.S. companies. Qualcomm gained 1.6%.
Household goods makers and communication services companies were among the decliners. Energy stocks also fell.
Last week, many stock indexes around the world hit their lowest levels of the year, before a late rally suggested some calm was returning to the markets. Analysts said the concerns that drove last week’s sell-off could resurface at any time.
Investors will be seeking new insight this week into the Federal Reserve’s willingness to further cut interest rates.
The central bank is releasing on Wednesday the minutes from last month’s meeting of policymakers. Two days later, Fed Chairman Jerome Powell is scheduled to deliver a speech at the central bank’s annual conference in Jackson Hole, Wyo.
Investors hope the Fed will continue to cut interest rates to shore up economic growth. The Fed lowered interest rates by a quarter of a point at its last meeting, the first cut in a decade.
“Coming into this meeting Friday for the speech, the market is really going to be looking for something that suggests that [Powell] has changed his approach and that this is going to be more of a systematic lowering of interest rates,” Roth said. “He may not provide what the market wants.”
Benchmark crude oil fell 3 cents to $56.18 a barrel. Brent crude oil, the international standard, rose 29 cents to $60.03 a barrel. Wholesale gasoline rose 2 cents to $1.68 a gallon. Heating oil climbed 2 cents to $1.85 a gallon. Natural gas rose 1 cent to $2.22 per 1,000 cubic feet.