Closing Stock Market SummaryThe S&P 500 declined 0.8% on Tuesday, but strength in the mega-cap technology stocks limited its decline and drove the Nasdaq Composite up 0.3% to close at a record high. The Dow Jones Industrial Average (-1.1%) and Russell 2000 (-1.9%) fell more than 1% after a recent streak of outperformance.
Apple (AAPL 343.99, +10.53, +3.2%), Amazon (AMZN 2600.86, +76.80, +3.0%), Microsoft (MSFT 189.80, +1.44, +0.8%), Alphabet (GOOG 146.16, +9.55, +0.7%), and Facebook (FB 238.67, +7.27, +3.1%) -- which represent approximately 20% of the S&P 500's market weight -- posted solid gains, as money appeared to rotate out of cyclical sectors and back into these tech behemoths.
Those cyclical sectors included the energy (-3.6%), industrials (-2.5%), and financials (-2.1%) sectors, which remain this month's leaders. Conversely, the information technology (+0.5%), communication services (+0.2%), and consumer discretionary (unch) sectors performed relatively well amid gains in the aforementioned stocks.
The rotation was a balancing act between taking profits and parking money in the mega-caps for their perceived safety. There was no strong inclination to sell the broader market, though, especially with the Fed set to announce its latest policy decision on Wednesday.
Within the transportation space, profit-taking interest cooled down the airline stocks. The U.S. Global Jets ETF (JETS 20.45, -1.27, -6.8%) declined nearly 7% after rallying 45% over the prior six sessions. The Dow Jones Transportation Average fell 2.3%.
U.S. Treasuries ended the session on a higher note, driving yields lower across the curve. The 2-yr yield declined two basis points to 0.20%, and the 10-yr yield declined six basis points to 0.83%. The U.S. Dollar Index declined 0.2% to 96.42. WTI crude gained 1.8%, or $0.68, to $38.92/bbl.
Reviewing Tuesday's economic data:
- The NFIB Small Business Optimism Index for May increased to 94.9 from 90.9 in April.
- April job openings decreased to 5.046 mln from a revised 6.011 mln in March (from 6.191 mln).
- Wholesale inventories increased 0.3% in April (consensus +0.4%) following a revised 1.1% decline in March (from -0.8%).
Looking ahead, investors will receive the FOMC Rate Decision, the Consumer Price Index for May, and the weekly MBA Mortgage Applications Index on Wednesday.
- Nasdaq Composite +10.9% YTD
- S&P 500 -0.7% YTD
- Dow Jones Industrial Average -4.4% YTD
- Russell 2000 -9.7% YTD