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Wall Street closed lower on Tuesday, pulled down by health care, tech and discretionary stocks. Investor mood was grim on the White House’s continued see-sawing on global trade deals, and economic data showing a historic trade deficit. Investors also awaited the Fed’s policy decision. All three benchmark indexes closed the session in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 1%, or 389.83 points, to close at 40,829.00. Twenty-two components of the 30-stock index ended in negative territory, while eight ended in positive.
The tech-heavy Nasdaq Composite fell 154.58 points, or 0.9%, to close at 17,689.66.
The S&P 500 fell 43.47 points, or 0.8%, to close at 5,606.91. Nine of the 11 broad sectors of the benchmark index closed in the red. The Health Care Select Sector SPDR (XLV), the Industrials Select Sector SPDR (XLI) and the Consumer Discretionary Select Sector SPDR (XLY) declined 2.8%, 0.9% and 0.9%, respectively, while the Utilities Select Sector SPDR (XLU) advanced 1.2%.
The fear-gauge CBOE Volatility Index (VIX) increased 4.7% to 24.76. A total of 14.77 billion shares were traded on Tuesday, lower than the last 20-session average of 18.9 billion.
Investor Mood Grim on Trump Pushing Back Hopes of Trade Deals
Over the past few weeks, Wall Street has recovered from the losses arising from Donald Trump's early-April announcement of plans to impose hefty tariffs on leading trading partners, primarily targeted at China. Investors have remained optimistic that the Trump administration will negotiate trade deals soon to end this tariff war.
However, during his meeting with Canadian Prime Minister Mark Carney on Tuesday afternoon, Trump retracted from the promises that trade deals were on the horizon, saying, “We don’t have to sign deals.” Earlier this week, Treasury Secretary Scott Bessent said, “We’re very close to some deals,” following up on Trump’s Sunday comments that agreements could come as early as this week. What the President said on Tuesday is in direct contradiction to the earlier ones, and the markets felt the jitters.
Health Care Tumbles on an FDA Appointment
The health care sector came under pressure on Tuesday on reports that the Food and Drug Administration had named Dr. Vinay Prasad, a vocal critic of the Covid-19 response, as its top vaccine official.
Consequently, shares of Moderna, Inc. MRNA and Merck & Co., Inc. MRK lost 12.3% and 4.6%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.