S&P500, Dow Jones Retreat, Nasdaq Ticks Up to New Record

07 Jul 2021 · 3rd Party Analysis

S&P500, Dow Jones Retreat, Nasdaq Ticks Up to New Record


In Summary

  • US stocks ended Tuesday action with mixed results, Nasdaq pushed to a fresh record
  • Concerns over Delta variant threaten to derail economic growth

Stocks on Wall Street wobbled on Tuesday pressured by increased concerns that the economic recovery may be slowing down. Investors approached the market with cautiousness, leading to losses for the S&P500 and the Dow Jones.

The broader S&P500 stock gauge slipped moderately and ended the day lower by 8.80 points, or 0.20%, to 4343.54. The 500-stock index snapped a seven-day winning streak. The Dow Jones Industrial Average declined 208.98 points, or 0.60%, to end the session at 34,577.37. The blue-chip index was dragged lower by losses in the banking sector and energy stocks. The Nasdaq Composite moved higher by 24.32 points, or 0.17%, to close at a new record of 14,663.64.

Traders and investors are trying to figure out how to align the constant stream of mixed economic results to see if the economy has peaked or the best of the recovery is yet to come. On Tuesday, the ISM Services index, a major gauge of the services sector, dropped to 60.1 in June, signaling a slowdown in demand as companies struggled to fill open positions. In contrast, the number for May stood at a record high of 64.0.

In individual stocks, shares of Amazon surged 4.7%, or $164.76, to a new record high of $3,675.74. The e-commerce and cloud computing giant notched a win as the Pentagon canceled its $10bn JEDI cloud contract with Microsoft. The decision by the Department of Defense could create an opportunity for Amazon, or other bidders, to present their proposals. The Department of Defense said qualified bidders could include Alphabet’s Google, Oracle, and IBM, in addition to Microsoft and Amazon.

Moreover, Amazon officially has a new CEO as Andy Jassy yesterday took over the role. Jeff Bezos is now the executive chairman of the board.

Moderate Gains for Bitcoin

Lingering concerns about the Delta variant have overshadowed the positive outlook for the short-term economic performance. While the easy-money policy from the Federal Reserve has helped lift stocks, the market’s hesitation in recent days could be partially attributed to a rise of Delta coronavirus infections, which could bring back mask mandates and other restrictive measures that were recently removed.

On that note, President Joe Biden yesterday encouraged Americans to get vaccinated. He did so, prompted by officials’ warning that the virus is likely to spread in parts of the country where the majority of the population is not inoculated.

In Europe, the stock market declined on Tuesday after investors feared that the Delta strain could dent the economic growth. The rapid spread of the Indian variant across the UK is posing risks to the European recovery, even more so after Boris Johnson, UK Prime Minister, announced he intends to lift almost all remaining coronavirus restrictions on July 19.

Meanwhile, in cryptocurrency action, bitcoin and peers on Tuesday notched some gains as traders attempted to improve the market sentiment. Bitcoin climbed less than 1% to $34,000, while ether advanced about 5%. Wednesday’s performance brings more green arrows to the crypto board. Bitcoin today is trading higher by over 3%, to $34,800, while ether is positive by nearly 4%, to $2,390.

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