Consumer staples, utilities, and health care sectors led the market lower
U.S. stocks closed near intraday lows on Tuesday, 28 May 2019 after major benchmarks surrendered earlier gains as investors sought new catalysts after a long holiday weekend while monitoring U.S.-China trade tensions. ALl three indices ended in the red while U.S. Treasuries rallied, as investors continued to show little enthusiasm for risk assets. Tuesday's decline wiped out an early gain for the benchmark index and sent it back near the 2800 level as losses accelerated into the close.
The Dow Jones Industrial Average shed 237.92 points, or 0.9%, to 25,347.77, while the S&P 500 index fell 23.67 points, or 0.8%, to 2,802.39. The Nasdaq Composite Index dropped 29.66 points, or 0.4%, to 7,607.35.
Trade progress remained elusive, while headlines continued to swirl. President Trump said on Monday he expects a deal in the future but said the U.S. is not ready for one at this moment. Investors showed a lack of buying conviction throughout the day, unraveling the rebound attempt and sending stocks lower in a steady, broad-based retreat.
The S&P 500 consumer staples, utilities, and health care sectors led the market lower.
Reviewing Tuesday's economic data, which included the Conference Board's Consumer Confidence Index for May, the FHFA Housing Price Index for March, and the S&P Case-Shiller Home Price Index for March, the Conference Board's Consumer Confidence Index increased to 134.1 in May (consensus 130.0) from 129.2 in April. The May reading is the highest level for the index since November 2018. The key takeaway from the report is that it shows consumer confidence has not been impacted yet by the increased trade tension between the U.S. and China, which includes an escalation in tariff rates on Chinese imports that could ultimately be passed along to the consumer.
The FHFA Housing Price Index for March increased 0.1% (consensus 0.3%) following a revised increase of 0.4% in February (from 0.3%). The S&P Case-Shiller Home Price Index for March increased 2.7% (consensus 2.9%) following a 3.0% increase in February.
The U.S. dollar ticked 0.3% higher on Tuesday relative to its peers. The 10-year Treasury yield touched its lowest since October 2017. Commodities priced in dollars can be hurt by a firmer greenback, making them more expensive to users of other currencies, and vice versa.
Bullion prices posted losses for a second straight session on Tuesday, 28 May 2019 with strength in the dollar and modest gains in the U.S. stock market pushing down prices for the precious metals after last week's gains. An upbeat economic reading added to the downbeat tone for haven metals.
Gold for June delivery on Comex fell $6.50, or 0.5%, to settle at $1,277.10 an ounce, while July silver lost 23.5 cents, or 1.6%, to $14.32 an ouncea fresh settlement low for 2019. Regular metals trading was closed Monday for the Memorial Day holiday.
Gold logged a 0.6% weekly rise through last Friday, but has turned lower by 0.6% month to date. Silver, tagged with both investing and industrial use, has exhibited greater volatility around the trade discussions; it added 1.2% for last week, though its monthly drop so far stands at about 4.4%.
U.S. oil futures ended higher on Tuesday, 28 May 2019 but global crude prices finished flat, after prices for both benchmarks logged their worst weekly performance of the year, as traders continued to weigh risks to supplies, as well as demand.
West Texas Intermediate crude for July delivery on the New York Mercantile Exchange climbed 51 cents, or 0.9%, to settle at $59.14 a barrel. Front-month contract prices lost 6.8% last week, driven there especially by Thursday's finish at $57.91, the lowest level in more than two months.
Front-month WTI was down nearly 8% for May so far. On Monday, regular trading for WTI on Nymex was closed for Memorial Day, though ICE-traded Brent crude had shortened trading hours. Global benchmark July Brent finished unchanged from Monday's settlement at $70.11 a barrel. It shed 4.9% last week, also the weakest weekly performance for a front-month contract this year.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
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