Stocks moved to the downside during trading on Tuesday, giving back ground after closing higher for five consecutive sessions. With the drop on the day, the major averages pulled back off the record closing highs set on Monday.

The major averages all closed in negative territory, although the tech-heavy Nasdaq underperformed its counter parts by a wide margin. While the Nasdaq tumbled 180.14 points or 1.2 percent to 14,660.58, the S&P 500 fell 20.84 points or 0.5 percent to 4,401.46 and the Dow dipped 85.79 points or 0.2 percent to 35,058.52.

The pullback on Wall Street partly reflected uncertainty ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

Traders are likely to pay close attention to the Fed’s statement for any clues the central bank is considering scaling back its asset purchase program.

Tech giants Alphabet (GOOGL), Microsoft (MSFT) and Apple (AAPL) are also among the companies releasing their quarterly results after the close of today’s trading, which may have contributed to some anxiety among traders.

On the earnings front, shares of UPS (UPS) moved sharply lower after the delivery giant reported second quarter earnings that beat estimates but weaker than expected domestic revenue.

Electric car maker Tesla (TSLA) also moved to the downside despite reporting second quarter results that exceeded analyst estimates.

Meanwhile, shares of General Electric (GE) moved higher on the day after the conglomerate reported better than expected second quarter results.

Negative sentiment may also have been generated in reaction to news that the CDC has recommend that people vaccinated for the coronavirus resume wearing masks indoors in areas of substantial or high transmission, particularly the South and West.

The revised guidance comes amid the rapid spread of the delta variant of the coronavirus in regions with low vaccination rates.

In economic news, the Commerce Department released a report showing new orders for U.S. manufactured durable goods saw continued growth in the month of June, although the increase came in well below expectations.

The report said durable goods orders climbed by 0.8 percent in June after spiking by an upwardly revised 3.2 percent in May.

Economists had been expecting orders to surge up by 2.1 percent compared to the 2.3 percent jump that had been reported for the previous month.

Excluding orders for transportation equipment, durable goods orders rose by 0.3 percent in June following a 0.5 percent increase in May. Ex-transportation orders were expected to climb by 0.8 percent.

A separate report from the Conference Board showed consumer confidence in the U.S. saw a slight improvement from an upwardly revised level in the month of July.

The Conference Board said its consumer confidence index inched up to 129.1 in July from an upwardly revised 128.9 in June. Economists had expected the index to drop to 124.9 from the 127.3 originally reported for the previous month.

With the unexpected uptick, the consumer confidence index reached its highest level since hitting 132.6 in February of 2020.

Sector News

Computer hardware showed a substantial move to the downside on the day, dragging the NYSE Arca Computer Hardware Index down by 2.3 percent.

Significant weakness was also visible among transportation stocks, as reflected by the 2.2 percent slump by the Dow Jones Transportation Average.

Semiconductor stocks also saw considerable weakness on the day, resulting in a 1.9 percent drop by the Philadelphia Semiconductor Index.

Oil service, steel and natural gas stocks also showed notable moves to the downside, while some strength emerged among utilities and tobacco stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index rose by 0.5 percent, while China’s Shanghai Composite Index plunged by 2.5 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the German DAX Index and the French CAC 40 Index slid by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries moved higher as traders looked ahead to tomorrow’s Fed announcement. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.2 basis points to 1.234 percent.

Looking Ahead

The Fed’s monetary policy announcement is likely to be in the spotlight on Wednesday, but traders are also likely to keep an eye on the latest earnings news.

In addition to the tech giants mentioned above, Advanced Micro Devices (AMD), C.H. Robinson (CHR), Juniper Networks (JNPR), Mattel (MAT), Starbucks (SBUX) and Visa (V) are also among the companies releasing their quarterly results after the close of today’s trading.

Bristol Myers Squibb (BMY), Humana (HUM), McDonald’s (MCD), Pfizer (PFE), Spotify (SPOT) and Tilray (TLRY) are also among the companies due to report their results before the start of trading on Wednesday.

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