U.S. Stocks Moving Mostly Lower Following Recent Upward Trend

(RTTNews) - After showing a lack of direction early in the session, stocks have moved mostly lower over the course of the trading day on Tuesday. The major averages have all moved to the downside, partly offsetting the strong gains posted in the previous session.

In recent trading, the Dow and the S&P 500 have fallen to new lows for the session. The Dow is down 124.20 points or 0.3 percent at 40,772.33, the Nasdaq is down 76.25 points or 0.4 percent at 17,800.53 and the S&P 500 is down 15.56 points or 0.3 percent at 5,592.69.

The weakness on Wall Street may partly reflect profit taking following the recent upward trend on Wall Street, which saw the Nasdaq and the S&P 500 close higher for eight consecutive sessions.

Trading activity has remained somewhat subdued, however, as traders seem reluctant to make significant moves ahead of key events later this week that could impact the outlook for interest rates.

Traders are likely to analyze the minutes of the Federal Reserve's latest monetary policy meeting, which are due to be released on Wednesday, for additional clues about the likelihood of a rate cut next month.

Later in the week, remarks by Fed Chair Jerome Powell and other Fed officials at the Jackson Hole Economic Symposium are also likely to attract attention.

According to CME Group's FedWatch Tool, there is a 73.5 percent of a quarter point rate cut next month and a 26.5 percent chance of a half point rate cut.

"September is being tipped as the month for that first Fed cut after inflation finally dropped below 3%," said Danni Hewson, AJ Bell head of financial analysis. "How far Jay Powell and the FOMC will go, how deep that first cut will be, and whether or not it could be the only one delivered this year are now the questions on investors' lips."

She added, "Nerves that the Fed had been too slow have been somewhat allayed, but every word spoken at this week's Jackson Hole Symposium will still be scrutinized."

Sector News

Substantial weakness among energy stocks is weighing on the markets, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index plunging by 2.7 percent and 2.3 percent, respectively.

The weakness among energy stocks comes as the price of crude oil is seeing further downside after moving sharply lower over the two previous sessions.

Notable weakness is also visible among steel stocks, as reflected by the 1.3 percent being posted by the NYSE Arca Steel Index.

Natural gas, semiconductor and brokerage stocks have also moved to the downside, while pharmaceutical stocks are seeing some strength on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index surged by 1.8 percent, while China's Shanghai Composite Index slumped by 0.9 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has slid by 0.9 percent, the German DAX Index is down by 0.3 percent and the French CAC 40 Index is down by 0.2 percent.

In the bond market, treasuries are extending the upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.1 basis points at 3.826 percent.