The stock market finished lower on Tuesday—although the Nasdaq Composite rallied to a new record high—a day after the S&P 500 turned positive for 2020 and fully recouped its losses from the selloff caused by the coronavirus pandemic.
The Dow Jones Industrial Average fell 1.1%, around 300 points, on Tuesday, while the S&P 500 was down 0.8% and the tech-heavy Nasdaq Composite was up 0.3%. While the other two major indexes lagged, the Nasdaq briefly climbed above 10,000 for the first time ever—as tech stocks like Amazon, Apple, Facebook and Microsoft rose to new record highs.
Stocks that would benefit from a reopening—including airlines, retailers and cruise operators—moved lower on Tuesday, after having led the market’s comeback in recent weeks.
Investors took some money off the table and continued to assess prospects for reopening the economy, a day after the S&P 500 turned positive for 2020 and fully recouped its losses from the coronavirus pandemic.
In other worrying news, Texas reported a record number of new coronavirus hospitalizations on Monday, weeks after it was one of the first states to begin reopening. Experts are worried that states lifting social distancing guidelines could face a wave of new infections.
The job gains from last week “indicate the reopening of state economies has been successful in putting millions back to work, with leisure and hospitality leading the way,” according to Wilmington Trust chief investment officer Tony Roth. “However, the unemployment rate continues to understate the true level of labor market disruption, as a number of categories of workers who have lost their jobs are not currently counted in the unemployment rate due to technical issues with how the data are measured.”
The S&P 500 rose 1.2%—turning positive for the year—on Monday, while the Dow Jones Industrial Average was up 1.7%, around 450 points, and the tech-heavy Nasdaq hit a new record high, gaining 1.1%. The market has now broken back above a crucial milestone, with both the S&P 500 and Nasdaq having fully recovered their losses from the coronavirus selloff earlier this year. Stocks have gotten a tremendous boost since Friday, after the biggest monthly job gains on record: The U.S. economy surprisingly added 2.5 million jobs in May, versus an expected loss of over 8 million jobs. The market has so far had a strong start in June, building on back-to-back monthly gains. Both the Dow and S&P rose more than 4% in May, after rallying more than 11% in April. The S&P is now up over 45% from its coronavirus crisis-level low on March 23, 2020.
What to watch for
The Federal Reserve begins its two-day meeting on Tuesday. Investors will be closely watching for any new forward guidance on the economy and how long the Fed plans to keep interest rates low.
I am a New York—based reporter for Forbes covering breaking news, with a focus on financial topics. Previously, I wrote about investing for Money Magazine and was an intern at Forbes in 2015 and 2016. I graduated from the University of St Andrews in 2018, majoring in International Relations and Modern History. Follow me on Twitter @skleb1234 or email me at sklebnikov@