Wall Street closed lower on Tuesday, ending a multi-day rally of consecutive record closing highs as profit-taking and worries over ongoing inflation fuelled a broad sell-off.
All three major US stock indexes lost ground, marking the end of an eight-session streak of all-time closing highs set by the S&P 500 and the Nasdaq.
After such a run, and in the absence of market-moving catalysts, market participants appeared primed to take profits.
“We’ve had an incredible run, so letting some air out of the balloon is perfectly normal,” said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. “It’s a reminder that stocks cannot go up every day,” Detrick added. “We are seeing some oversold weakness today, nothing overly concerning.”
The Labour Department’s producer prices (PPI) report showed inflation continues to gather heat as ongoing goods and labour supply challenges send price growth further beyond the US Federal Reserve’s average annual 2% inflation target.
Wednesday’s CPI report will be scrutinised for clues regarding the extent to which producer prices are being passed along to the consumer, whose spending represents about 70% of the US economy.
According to preliminary data, the S&P 500 lost 16.25 points, or 0.35%, to end at 4,685.45 points, while the Nasdaq Composite lost 95.19 points, or 0.60%, to 15,887.16.
The Dow Jones Industrial Average fell 113.66 points, or 0.31%, to 36,318.56.
The finish line for third-quarter earnings season is insight, with 445 of the companies in the S&P 500 having reported.
Of those, 81% have beat consensus, according to Refinitiv.
General Electric Co surged following the 129-year-old industrial conglomerate’s announcement that it would split into three separate public companies to simplify its business.
Tesla Inc extended its losses, weighing down the consumer discretionary sector after Chief Executive Elon Musk’s Twitter poll proposing to sell a tenth of his holdings garnered a 57.9% vote in favor of the sale.
This raised questions as to whether Musk violated a settlement with the US Securities and Exchange Commission (SEC).
Online retail trading app Robinhood Markets Inc reported a security breach affecting about 5 million of its customers, sending its shares lower.
On the plus side, upbeat quarterly results boosted shares of video game maker Zynga Inc and home builder D.R. Horton.
