Stocks pull back from earlier gains in choppy trade, S&P 500 heads into 5-day losing streak

US stocks fell on Tuesday, reversing earlier gains as investors looked to key inflation and earnings data later in the week that will provide the Federal Reserve with updated information on the state of the US economy.

The S&P 500 fell 0.77%, but was far from earlier declines that pushed the index to its lowest level since November 2020. The Nasdaq Composite also rebounded from a 52-week low but is still down 1.39%, weighed down by faltering tech stocks including That’s Meta. The Dow Jones Industrial Average rose 20 points, or 0.07%, boosted by jumps in the Amgen and Green Boots alliance.

Bond prices also fell, and the yield on US 10-year Treasuries approached the key 4% overnight. yields They pulled back from their rally on TuesdayWith the 10-year yield rising nearly 2 basis points at 3.91%. Bond yields are inverse with prices, and the basis point is one hundredth of one percent.

Stocks retreated from today’s highs and bond yields rose when the Bank of England announced its market The intervention will soon be overAnd that pension funds have only three days to rebalance positions.

Investors are waiting for some major inflation reports to be released later in the week that will show how aggressively the Fed will raise interest rates in the future to tame inflation. On Wednesday, the producer price report will be released followed by the September CPI on Thursday. On Friday, September retail sales will give insight into consumption.

The trajectory of interest rate increases by the central bank will determine whether the US economy has fallen into a recession or is facing a downturn.

“This is an awful market environment grappling with a weak economy, uncertainty about earnings and how long the Fed tightening will last, and sentiment issues with the psychology of very risk-averse investors,” said David Bahnsen, chief investment officer at The Bahnsen. group, in a note on Tuesday.

“We think the Fed will raise rates one or two more times until the fed funds rate hits 4% and then pause, at which point the Fed will assess the damage that has been done,” he added.

JPMorgan CEO Jamie Dimon warned Monday that the United States is likely to fall into a recession in the next “six to nine months,” and said the S&P 500 could drop another 20% depending on whether the Fed engineered a downside. weak or difficult. Economy. Stocks fell on Monday, with the Nasdaq index hitting a two-year low, on comments hitting technology stocks.

This week also begins earnings season. on Friday, JP MorganAnd the Wells FargoAnd the Morgan Stanley And the City Four of the world’s largest banks announce quarterly earnings.