The S&P 500 and the Nasdaq snapped their longest rally of the year, with the S&P 500 (^GSPC) dropping about 0.2% after coming off an eight-strong run of daily wins for the benchmark index — its longest since November.

The Dow Jones Industrial Average (^DJI) also shed around 0.2%, or less than 100 points, while the tech-heavy Nasdaq Composite (^IXIC) fell roughly 0.3%.

The focus now shifts to Jackson Hole, where Fed Chair Jerome Powell will deliver a speech on economic policy on Friday.

While the AI trade has once again been leading the market's latest leg higher, there have been promising developments under the surface at play too.

The S&P 500 equal-weighted index (^SPXEW), which is less influenced than the cap-weighted S&P by moves in Big Tech, just hit a new record high. Sectors including Utilities (XLU), Consumer Staples (XLP), and Health Care (XLV) are now sitting at 52-week highs, while Financials (XLF) are currently at a record level.

"This has been a really healthy rally in our view," Abby Yoder, JPMorgan US equity strategist, told Yahoo Finance. "It has been this broadening out. Breadth is the best that it's been since the summer of last year. In terms of the participation across different sectors, different names."

Still, the S&P 500 is up almost 18% this year, outpacing the equal-weighted index's nearly 9% this year.

"The reality is that in bull markets, all sectors typically go up," said Kevin Gordon, senior investment strategist at Charles Schwab.

In July, Gordon's team at Schwab pointed out in Yahoo Finance's Chartbook that the amount of S&P 500 companies outperforming the index on a rolling two-month basis had fallen to a historic low.

Since then, that narrative has fully flipped. As of Monday's close, roughly 58% of members in the S&P 500 were outperforming the index, the largest swath of outperformance since November 2022, when the current bull market began.

"The trend is much more important," Gordon said. "Across those metrics, things look relatively healthy."

Health Care (XLV) and Consumer Staples (XLP) were the only two sectors in the green on Tuesday, while Energy (XLE), Industrials (XLI), and Financials (XLF) served as the day's biggest laggards.

All three major indexes edged lower after notching their longest rally so far this year.

Notably, Technology (XLK) has led the comeback in stocks.

Although it was not the best-performing sector on Tuesday, if you take a look at the sector action over the past 11 trading days, it's clear tech has been a leader as investors "buy the dip" from its early August sell-off.

Consumer Discretionary (XLY) has also outperformed in recent weeks, with stronger-than-expected retail sales pointing to a consumer who is still spending.

More Americans are looking for jobs as unemployment concerns rise to their highest level in a decade.

According to a new survey released by the Federal Reserve Bank of New York on Monday, the average expected likelihood of becoming unemployed in the next four months reached its highest level in the survey's 10-year history, rising to 4.4% compared to 3.9% in the year-earlier period.

The expected likelihood of moving to a new employer also increased, rising to 11.6% last month from the 10.6% seen in July 2023.

More respondents are also actively on the job hunt, with 28.4% saying they've been searching for a new job over the past four weeks — the highest level since March 2014 and an increase from 19.4% in July 2023.

The survey, which also noted decreased satisfaction with wage compensation, non-wage benefits, and promotion opportunities at respondents’ current jobs, comes as the Federal Reserve weighs recent labor market weakness with the unemployment rate now at 4.3%.

Economists and strategists have warned any further deterioration of the labor market would likely have a negative spillover effect to markets and beyond.

"The problem is that we continue to see weakness in the labor market and we think that that's going to ultimately be what drives this market lower," Ahmed Riesgo, chief investment officer at Insigneo, told Yahoo Finance on Tuesday.

"We know that the US consumer is doing OK, but the US consumer is doing OK because they still have a job. The second that the employment market flips from one of surplus to one of deficit, which is something that we think we're rapidly nearing, we think the US consumer, unfortunately, will falter."

But others disagree, pointing to recent data points that paint a much different picture of the economy.

Consumer prices have continued to to ease closer to the Fed's 2% inflation target. Positive retail sales data for the month of July showed the consumer is still spending. Consumer confidence is rebounding. And recent filings for initial unemployment benefits have fallen more than expected.

"We're coming off unusual lows [in the unemployment rate] following a very unusual time during the pandemic," Joe Brusuelas, chief economist at RSM, told Yahoo Finance on Tuesday, noting hiring needed to slow in order to return to price stability. "A lot of the rules that some of these so-called forward-looking investors use aren't really going to work this time because the economy is in a very different place."

Gold (GC=F) prices extended their recent rally on Tuesday, with the precious metal trading above $2,545 per ounce as investors anticipate a September rate cut from the Federal Reserve.

Gold, which typically does well in low-interest-rate environments as it does not produce an annual yield, has also seen an uptick in prices amid sticky inflation, along with heightened geopolitical risks and political uncertainty.

UBS issued a recent bullish outlook, estimating gold could reach $2,600 per ounce by the end of 2024.

Notably, with prices now firmly above $2,500 an ounce, one bar of gold costs more than 1 million dollars.

Stocks edged slightly lower on Tuesday after notching their longest rally of the year.

The S&P 500 (^GSPC) hugged the flatline, coming off an eight-strong run of daily wins for the benchmark index — its longest since November. The Dow Jones Industrial Average (^DJI) also traded flat, while the tech-heavy Nasdaq Composite (^IXIC) dropped about 0.1%.