Stocks fell on Tuesday as megacap technology shares and other growth names came under pressure as the 10-year U.S. Treasury yield reached its highest pre-pandemic level. However, positive consumer confidence data kept losses at a minimum as market economic reopening sentiment remained positive.
The 10-year U.S. Treasury yield increased on 6 basis points to more than 1.77% earlier on Tuesday, reaching 14 month highs on bullish sentiment towards board economic recovery coupled with rising inflation. The benchmark rate later edged lower at 1.72%.
Meanwhile, consumer confidence jumped higher in March, reaching its highest level since the start of the pandemic as stimulus checks and accelerated vaccine rollouts boosted economic outlooks. The Conference Board's consumer confidence index rose to 109.7 in March from 90.4 in February, exceeding expectations.
Here's how the market settled on Tuesday:
S&P 500 Index (NYSE: SPY): -0.32% or -12.52 points to 3,958.57
Dow Jones Industrial Average (NYSE: DIA): -0.31% or -104.41 points to 33,066.96
Nasdaq Composite Index (NASDAQ: QQQ): -0.11% or -14.25 points to 13,045.39
For Stocks, reopening names rallied on increased consumer confidence, with American Airlines (NASDAQ: AAL), Carnival (NYSE: CCL), Norwegian Cruise (NYSE: NCLH), and United Airlines (NASDAQ: UAL) all climbing over 3%. ViacomCBS (NASDAQ: VIAC) and Discovery (NASDAQ: DISCA) both rebounded slightly from heavy losses in the previous session in the Archegos Capital Management default.
For Sector Performance, sectors ended Tuesday's session lower with Consumer Staples (NYSE: XLP) leading losses. The only sectors that ended in the green were Consumer Discretionary (NYSE: XLY), Financials (NYSE: XLF) and Industrials (NYSE: XLI).
For Commodities and Currency, the U.S. Dollar (NYSE: UUP) rose against other major currencies on Tuesday to four month highs, as investor sentiment turned bullish towards U.S. economic recovery and Treasury yields rose to 14-month highs. The dollar index rose above 93 during the session and was last up 0.45 at 93.29. Gold (NYSE: GLD) prices fell against the strengthening dollar and higher Treasury yields, with recovery optimism also tarishing the yellow metal's appeal. Spot gold was down 1.7% at $1,682.81 per ounce, while U.S. gold futures settled 1.7% lower at $1,686 per ounce. Crude oil futures declined on Tuesday as the Suez Canal reopened and the dollar rallied. International benchmark Brent Crude (NYSE: BNO) slipped 1.3% to $64.14 per ounce, while domestic index West Texas Intermediate (NYSE: USO) settled 1.6% lower at $60.55 each.
For Wednesday, traders will turn their attention to the ADP employment report for March.