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May 20 Wall Street's rally paused Tuesday as investors searched for new catalysts following a more than 10% S&P 500 surge from April lows.
The S&P 500 was down 0.2% at 5,950.42, while the Dow slid 0.2% to 42,693.96 and the Nasdaq Composite lost 0.2% to 19,183.74. The relative strength index for the SPDR S&P 500 ETF Trust is approaching overbought territory.
Eight days ago, a tentative U.S.China trade truce, which included temporary tariff cuts, sparked the current market run. That momentum wavered Monday after Moody's downgraded the U.S. credit rating, though stocks rebounded to eke out modest gains.
The main takeaway seems to be that Moody's hasn't said anything the market didn't already know, said David Morrison, senior market analyst at Trade Nation. He added that investors appear confident the U.S. will resolve trade issues with partners by early June, or by August with China.
Meanwhile, President Donald Trump's major tax proposal drew attention on Capitol Hill. A chance to cut deficits and curb government spending is being averted by a pork-filled tax bill that will balloon our debt, said Ross Gerber, co-founder of Gerber Kawasaki Wealth & Investment Management, on X.
Among stocks, Home Depot inched lower despite reporting positive U.S. comparable sales growth.
On the bond front, the 10-year U.S. Treasury yield rose three basis points to 4.49%, while the two-year yield dipped one basis point to 3.97%.
This article first appeared on GuruFocus.