After recovering from an early move to the downside and moving mostly higher in morning trading on Tuesday, stocks showed a lack of direction over the remainder of the session. The major averages spent the day swinging back and forth across the unchanged line.
The tech-heavy Nasdaq eventually ended the day firmly positive, jumping 150.60 points or 0.9 percent to 17,449.89. The S&P 500 (SPI:SP500) also climbed 21.22 points or 0.4 percent to 5,633.07, but the narrower Dow edged down 11.80 points or less than a tenth of a percent to 41,989.96.
The volatility on the day came as traders continue to express uncertainty about President Donald Trump’s trade policies ahead of the announcement of reciprocal tariffs on Wednesday.
“On Wednesday, it will be Liberation Day in America, as President Trump has so proudly dubbed it,” White House press secretary Karoline Leavitt said.
“The President will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades,” she added. “He’s doing this in the best interest of the American worker.”
A report from the Washington Post this morning said White House aides have drafted a proposal to impose tariffs of around 20 percent on most imports to the U.S.
However, the Washington Post noted White House advisers cautioned that several options are on the table and no final decision has been made.
The higher close on the day may have reflected bargain hunting following recent weakness on Wall Street, which saw the Nasdaq and S&P 500 hit six-month intraday lows on Monday before regaining ground.
While the S&P 500 managed to reach positive territory, the Nasdaq ended the day at its lowest closing level since early last September.
In U.S. economic news, a report from the Institute for Supply Management showed activity in the U.S. manufacturing sector contracted in March after two consecutive months of expansion.
The ISM said its manufacturing PMI dipped to 49.0 in March from 50.3 in February, with a reading below 50 indicating contraction. Economists had expected the index to edge down to 49.5.
Sector News
Despite the higher close by the broader markets, biotechnology stocks pulled back sharply after surging on Monday, resulting in a 3.2 percent plunge by the NYSE Arca Biotechnology Index.
Pharmaceutical stocks also showed a significant move to the downside, dragging the NYSE Arca Pharmaceutical Index down by 2.8 percent.
Healthcare and airline stock also saw considerable weakness on the day, while software stocks turned in a strong performance, contributing to the advance by the Nasdaq.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index crept up by less than tenth of a percent, while China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index both rose by 0.4 percent.
The major European markets also moved to the upside on the day. While the German DAX Index surged by 1.7 percent, the French CAC 40 Index jumped by 1.1 percent and the U.K.’s FTSE 100 Index climbed by 0.6 percent.
In the bond market, treasuries showed a strong upward move after ending the previous session little changed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled 9.0 basis points to a nearly four-month closing low of 4.156 percent.
Looking Ahead
News about Trump’s reciprocal tariffs is likely to be in the spotlight on Wednesday, potentially overshadowing reports on private sector employment and factory orders.
SOURCE: RTTNEWS