Tuesday’s market is telling two stories at once. Around midday in Chicago, the Nasdaq composite touched an intraday record high of 27,212.68, eclipsing its previous intraday mark of 27,190.21 from June 1, Reuters reported. At almost the same moment, the Dow Jones Industrial Average was falling nearly 300 points, or 0.6%, to around 51,757, its session low, dragged down by a sharp selloff in financial names, MarketWatch reported. The S&P 500 wavered between gains and losses near 7,759, according to FactSet data cited by MarketWatch.
The weight on the Dow is coming from banks. The spread between short-term and longer-term Treasury yields is narrowing, which squeezes the profit margins banks earn by borrowing short and lending long, and investors read that narrowing as a sign of tightening financial conditions, MarketWatch reported. JPMorgan Chase, a heavyweight in the Dow, fell more than 3%, and Cisco Systems dropped nearly 6%, Investor’s Business Daily reported.
Not everything is sinking. Amgen climbed nearly 4%, making it one of the morning’s biggest Dow gainers, while Honeywell rose more than 2% to near its session highs, per Investor’s Business Daily. Homebuilder and biotech stocks were also shining, while capital markets names fell. In tech, Shopify and Astera Labs each gained roughly 7%, but Intuit slumped nearly 5%, according to Investor’s Business Daily. Apple traded near a buy point as it tried to hold its recent strength.
Commodities and bonds are adding their own push and pull. West Texas Intermediate crude reversed higher to around $96.15 a barrel as reports circulated that Saudi Arabia is looking to reopen a critical pipeline this week, Investor’s Business Daily reported. That came alongside the Kyodo report that Iran has offered to reopen the Strait of Hormuz within seven days if the United States takes initial steps toward easing military pressure, which helped cap the gains earlier. The 10-year Treasury yield ticked up a single basis point to 4.98%, per Investor’s Business Daily, while Bitcoin took a breather at about $86,200 after Monday’s strong gain.
There is also the matter of President Trump’s address to the United Nations on Tuesday, in which he took a forceful tone on Iran even as diplomats circulate around possible U.S.-Iran talks, Investor’s Business Daily reported.
What to watch into the close: whether the Nasdaq can hold above its new intraday watermark, whether financial stocks find their footing as the yield picture develops, and what Fed officials say this afternoon. Richmond Fed President Thomas Barkin, New York Fed President John Williams, and Fed Vice Chair Philip Jefferson are all on the schedule today, and after last week’s quarter-point rate hike, traders will parse every word for clues about what comes next.
