After ending the previous session sharply higher, stocks have shown a lack of direction over the course of morning trading on Tuesday. The major averages have spent the morning bouncing back and forth across the unchanged line.
Currently, the major averages are turning in a mixed performance. While the Dow is down 35.72 points or 0.1 percent at 33,841.25, the Nasdaq is up 18.42 points or 0.1 percent at 14,159.90 and the S&P 500 is up 4.54 points or 0.1 percent at 4,229.33.
The choppy trading on Wall Street comes as traders take a break following the substantial volatility seen over the past few sessions.
The Dow saw its best day since March on Monday, although the rally came after the blue chip index tumbled to its lowest closing level in well over two months last Friday.
Meanwhile, the jump seen in the previous session lifted the broader Nasdaq and S&P 500 back within striking distance of the record closing highs set last Month.
Traders may also be looking ahead to Federal Reserve Chair Jerome Powell’s testimony before the House Select Subcommittee on the Coronavirus Crisis this afternoon.
In prepared remarks, Powell noted the economy has shown sustained improvement since he last appeared before the committee, citing widespread Covid-19 vaccinations as well as unprecedented monetary and fiscal policy actions.
Powell acknowledged inflation has increased notably in recent months but reiterated the view that the jump is due to “transitory” factors and predicted inflation would drop back toward the Fed’s longer-run goal of 2 percent price growth.
The Fed chief warned the coronavirus pandemic continues to pose risks to the economic outlook, pointing to the slowing pace of vaccinations and new strains of the virus.
Powell stressed that the Fed will do “everything we can to support the economy for as long as it takes to complete the recovery.”
Traders are likely to keep an eye on the question-and-answer portion of Powell’s testimony for further clarity about the outlook for monetary policy.
On the U.S. economic front, the National Association of Realtors released a report showing existing home sales extended a recent pullback in May but fell by less than economists had expected.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Airline stocks have shown a significant move to the downside, however, with the NYSE Arca Airline Index tumbling by 2.3 percent.
Natural gas and banking stocks are also seeing some weakness on the day, while strength among retail stocks has lifted the Dow Jones U.S. Retail Index to its best intraday level in over a month.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index soared by 3.1 percent, while China’s Shanghai Composite Index climbed by 0.8 percent.
Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has edged down by 0.1 percent, the German DAX Index is up by 0.1 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent.
In the bond market, treasuries have bounced back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.480 percent.
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