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S&P 500 dips for a second day as benchmark struggles to reach a record

S&P 500 dips for a second day as benchmark struggles to reach a record

08 Jun 2021

The S&P 500 fell for a second day on Tuesday as the benchmark struggled to refresh its record.

The broad equity benchmark traded 0.4% lower, sitting 0.6% below its record high reached last month. The Dow Jones Industrial Average dipped 160 points, while the tech-heavy Nasdaq Composite dipped 0.3%.

Tesla erased earlier gains and fell more than 1% even after an increase in deliveries. The electric car maker delivered 33,463 China-made vehicles in that market in May, a 29% jump from April.

Boeing shares also rolled over and traded in negative territory. The stock gained earlier after Southwest Airlines said it is upsizing its order for the smallest 737 Max model by nearly three-dozen planes amid an improvement in travel demand.

The Reddit-fueled trading mania seemed to have spread to other stocks, notably Clover Health and Wendy’s on Tuesday. The health care startup soared as much as 100%, while shares of the fast food chain rallied 13%.

The U.S. Securities and Exchange Commission said Monday it’s watching ongoing volatility in the market and vowed to protect retail investors.

On the data front, job openings in April soared to a new record high, with 9.3 million vacancies coming amid the grand economic recovery. The standard set in April was well above the 8.3 million in March that itself was a new series high going back to 2000 for the Labor Departments Job Openings and Labor Turnover Survey.

Multiple global websites were experiencing an outage early Tuesday, but the size of the issue and how widespread it is was unclear. Futures, especially those for the tech-heavy Nasdaq, appeared to take a leg down when news of the outage spread, but then quickly recovered most of those losses. It was unclear at this point if the move was related.

Investors are awaiting new inflation signals later this week following Friday’s jobs report. While the U.S. added fewer jobs than expected in May, the unemployment rate dropped to 5.8% from 6.1% and markets reacted positively to the readout.

“The reflation trade is taking a bit of a backseat even as Friday’s ‘Goldilocks’ payrolls report served to quell some concerns that the economy might be doing a bit too well,” Goldman Sachs’ Chris Hussey said in a note Monday. “Today’s market action shows that these concerns might be here to stay.”

May’s consumer price index is set to be released Thursday. Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.

All eyes are on the next Federal Open Market Committee meeting scheduled for June 15-16 as investors look for what Fed officials will say about inflation and monetary policy. Recent comments by officials suggest the Fed is beginning to prepare markets for tapering its asset purchases.