U.S. market indexes were lower on Tuesday as Fed uncertainty weighed on stock valuations. For the day, the Dow Jones Industrial Average closed at 18552.02 for a loss of -84.03 points, or -0.45%. The S&P 500 was also down, closing at 2178.15 for a loss of -12.00 points, or -0.55%. The Nasdaq Composite closed lower at 5227.11 for a loss of -34.90 points, or -0.66%. The VIX Volatility Index was higher for the day at 12.59 for a gain of 0.78 points, or 6.60%.
In the Dow Jones Industrial Average, the following stocks led losses for the day:
Johnson & Johnson (JNJ, Financial) -1.61%
Verizon (VZ, Financial) -1.60%
Microsoft (MSFT, Financial) -1.20%
Travelers (TRV, Financial) -1.06%
Pfizer (PFE, Financial) -0.93%
Coca-Cola (KO, Financial) -0.92%
Economic factors affecting trading on Tuesday included the Consumer Price Index, Housing Starts, Industrial Production and a report on E-Commerce Retail Sales. The Consumer Price Index was unchanged from the previous month. On an annual basis, the Consumer Price Index increased 0.8%. The Consumer Price Index Less Food and Energy increased 2.2% annually. Housing starts increased to a rate of 1.211 million SAAR. Industrial production was higher with a month over month gain of 0.7%. E-commerce sales reported a gain, as retail industry companies have been in the spotlight in recent days. E-commerce sales growth was reported at 4.5% SAAR for the second quarter.
Fed uncertainty was a key factor for the market on Tuesday. As the economy continues to improve, investors are increasing the likelihood of a September rate hike. Wednesday’s Fed minutes will provide more insight into the Fed’s positioning. Many Fed officials are indicating that economic data is improving, which could lead to a rate increase this year. However, broader market factors are also affecting uncertainty around the timing of a rate increase.
In a CNBC report Tuesday, market specialists discussed some of the additional factors that could affect the Fed’s timing for a federal funds rate increase.
Disclosure: I do not own any stocks included in this article.
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