U.S. Stocks Finish Choppy Trading Day Narrowly Mixed

Following the rebound seen during Monday’s session, stocks fluctuated over the course of the trading day on Tuesday. The major averages swung back and forth across the unchanged line as the day progressed before eventually closing narrowly mixed.

While the Nasdaq fell 70.41 points or 0.4 percent to 19,643.86, the S&P 500 crept up 2.06 points or less than a tenth of a percent to 6,068.50 and the Dow rose 123.24 points or 0.3 percent to 44,593.65.

The choppy trading on Wall Street came as traders digested congressional testimony by Federal Reserve Chair Jerome Powell, who told the Senate Banking Committee the central bank does “not need to be in a hurry” to adjust its policy stance.

Powell noted interest rates have been lowered by a full percentage point since last September, describing the Fed’s current policy stance as “significantly less restrictive than it had been.”

“We know that reducing policy restraint too fast or too much could hinder progress on inflation,” Powell said. “At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment.”

Powell also suggested the Fed has options in determining the future path for rates depending on how the economy evolves.

“If the economy remains strong and inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer,” Powell said. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

He continued, “We are attentive to the risks to both sides of our dual mandate, and policy is well positioned to deal with the risks and uncertainties that we face.”

Stocks moved to the downside in early trading amid lingering concerns about a global trade war after President Donald Trump officially announced tariffs on U.S. steel and aluminum imports.

A statement from the White House said Trump is reinstating a 25 percent tariff on steel imports and increasing tariffs on aluminum imports to 25 percent.

Sector News

Networking and computer hardware stocks saw considerable weakness on the day, contributing to the decrease by the tech-heavy Nasdaq.

Significant weakness was also visible among airline stocks, as reflected by the 2.1 percent slump by the NYSE Arca Airline Index.

Gold and biotechnology stocks also showed notable moves to the downside, while oil producer stocks moved higher along with the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday, with the Japanese markets closed for a holiday. Hong Kong’s Hang Seng Index slumped by 1.1 percent, while South Korea’s Kospi advanced by 0.7 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index climbed by 0.6 percent, the French CAC 40 Index rose by 0.3 percent and the U.K.’s FTSE 100 Index inched up by 0.1 percent.

In the bond market, treasuries moved l after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by climbed 4.4 basis points to 4.537 percent.

Looking Ahead

Trading on Wednesday is likely to be driven by reaction to the Labor Department’s report on consumer price inflation in January and its impact on the outlook for interest rates.