Stock market today
A mixed close today for the US stock market. Early gains for the stock indexes erased and at the close S&P 500 and Dow Jones closed flat, and Nasdaq and Russell 2000 with minor gains, Small-cap stocks outperformed. The closing numbers for the US stock market today follow.
S&P 500: 4,354.19,-3.54(-0.08%)
Dow 30: 33,919.84,-50.63(-0.15%)
Russell 2000: 2,188.69,+6.49(+0.30%)
Stock market news
“Stocks fluctuated between gains and small losses on Tuesday, a day after a bevy of concerns out of China and in Washington spurred a steep sell-off across risk assets.
Traders also turned their attention to the start of the Federal Reserve’s latest two-day monetary policy-setting meeting, where the central bank is expected to give hints about curtailing its massive stimulus that’s helped contain the worst economic effects of COVID-19.
On Monday, the Dow had closed lower by more than 600 points, or about 1.8%, while the Nasdaq shed more than 2%. Fears of a financial contagion that could ensue if China’s largest real estate developer China Evergrande defaults under its massive debt burden served as one major point of concern for investors at the start of the week, triggering a global equity rout that put the S&P 500 on track for its third straight weekly decline.
This built on worries from earlier this month as Wall Street pundits revised down economic and profit growth expectations for the remaining months of the year.
And this week, investors are facing additional uncertainty over debates in Washington to raise the U.S. debt ceiling to prevent a government shutdown and U.S. government defaults on federal payments, and avoid what Treasury Secretary Janet Yellen said would become “widespread economic catastrophe.”
On Wednesday, the U.S. Federal Open Market Committee (FOMC) is set to deliver its latest monetary policy decision, which is expected to show the Federal Reserve is nearing the announcement of the timing of its plan to begin tapering its asset-purchase program that had helped support the economic recovery.
Still, a number of equity strategists offered a sanguine take despite the risks.
“Markets are clearly having some angst on the potential spillover effects from Evergrande, along with some nervousness over the September FOMC meeting. We’ve been in the camp that we’re overdue for a correction,” Cliff Hodge, chief investment officer for Cornerstone Wealth, wrote in an email. Monday evening. “At the moment, we’re not worried about a market crash. The Fed and Evergrande are not new. The market has known about both of these for a couple weeks in the case of Evergrande and a couple of months now for the Fed.”
“Sentiment is overly bearish, and institutions are well-hedged going into these events,” he added. “Markets don’t crash when everyone expects it. They crash when everyone is crowded and levered long.”
Others struck a similar tone.
“I think what people are missing if you’re leaning into this with a sell button is the fact that the economy is still expanding. Yes, it’s slowed down from the late spring, early summer peak, but we still have an economic expansion that’s likely to take hold here,” Jason Ware, Albion Financial Group chief investment officer, told Yahoo Finance Live Monday afternoon.
“We have an economy that’s working, we have record earnings that we’re going to hit this year, we have a Fed that’s still very much in full accommodation mode — and by the way, at their meeting this week, they’re probably going to be discussing what’s happening in China [as] just another reason for them to not taper this month,” he added. “And then finally, we have a fiscal authority that’s still in full-on wanting to stimulate the economy with spending.”