The S&P 500 Futures Market Dips as Traders Fret Over Rally Exhaustion and Apple Touches a Four-month Low

U.S. stocks experienced a downward trend on Tuesday as investors adopted a cautious approach in anticipation of significant speeches and data releases later in the week concerning interest rates and the overall economy.

‍

Here's a snapshot of how major indexes were performing:

• The S&P 500 (SPX) declined by 43 points, or 0.8%, to reach 5,086.
• The Dow Jones Industrial Average (DJIA) dropped 239 points, or 0.6%, settling at 38,750.
• The Nasdaq Composite saw a notable fall of 277 points, or 1.7%, closing at 15,930.

‍

This decline marked a potential consecutive loss for major indexes after the S&P 500 and Nasdaq retreated from their record highs at the end of the previous week.

‍

Factors influencing market movements:The current trading session on Tuesday reflected a cautious sentiment. Despite a positive start to the year for markets, with investors navigating issues such as moderating inflation, economic growth, and impending decisions on interest rates, there is an air of risk aversion. Notably, Bitcoin reached a new record on Tuesday, briefly surpassing $69,000.

‍

Jim Reid, a strategist at Deutsche Bank, highlighted the subdued start to the week, with key events scheduled later, including Federal Reserve Chair Jerome Powell's appearances in Congress on Wednesday and Thursday, the U.S. jobs report on Friday, and the European Central Bank decision on Thursday.

‍

Kim Forrest, founder and chief investment officer at Bokeh Capital Partners, drew parallels between the current week and the previous one. She emphasized the ongoing concern over key events, with Powell's testimony and the February jobs report taking center stage. Powell's remarks are expected to be closely analyzed for insights into future interest rate movements. Fed Vice Chair for Supervision Michael Barr is also slated to speak on Tuesday afternoon.

‍

For Forrest, Friday's jobs report holds particular significance as it may provide clearer indications of market implications. She expressed hope for a steady addition of new jobs and softening wage inflation, indicating that the economy appears to be progressing steadily.

‍

Before the release of the jobs report on Friday, Tuesday featured economic data. The service-sector PMI for February fell to 52.6% from 53.4% in January, showing a larger-than-expected drop. Nevertheless, a reading above 50% indicates economic expansion, a trend observed since December 2022.

‍

In addition, factory orders declined by 3.6% in January, influenced by a reduction in contracts for passenger airplanes from Boeing.

‍

Adding to the market pressure on Tuesday was a decline in Apple Inc.'s (AAPL) shares, impacting the Dow, Nasdaq, and S&P 500. Reports indicating a 24% decrease in iPhone sales in China during the first six weeks of the year contributed to the dip in Apple's stock.

‍