New York: Wall Street’s main indexes slid on Tuesday, with the S&P 500 logging its biggest one-day percentage fall in about a month, weighed down by a drop in US retail sales that raised concerns about the economic recovery, as well as by disappointing results from Home Depot.
Most of the S&P 500’s sectors finished lower, with consumer discretionary the weakest performer, falling 2.3 per cent.
A report showed that US retail sales fell more than expected in July, as supply shortages depressed motor vehicle purchases and the boost to spending from the economy’s reopening and stimulus checks faded, suggesting a slowdown in growth early in the third quarter.
At this point, when you have some of these negative macro indicators coming in and you have markets that are selling at all-time highs with pretty expensive valuations by any measure, there is just going to be more vulnerability to that kind of bad news.
Prior to Tuesday’s drops, the S&P 500 and the Dow Jones Industrial Average had closed at record highs for five straight sessions.
Equities made modest gains in Japan, China and Hong Kong. Overnight, US-listed Chinese equities tumbled again on Beijing's regulatory crackdown. US equity contracts pared losses in the wake of the S&P 500's largest decline in a month.
With the market in a period that has seasonally been weak historically, investors have said stocks may be due for a significant drop, with the S&P 500 yet to experience a 5 per cent pullback this year. On Monday, the S&P 500 closed 100 per cent above its March 2020 low.
Still, market watchers have said that huge amounts of cash held by investors and companies could protect stocks from severe declines, as buyers are quick to look for opportunities to scoop up cheaper shares. Indeed, the indexes ended well above their session lows on Tuesday as stocks partially recovered late in the day.