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- US equities fell from record highs on Tuesday as investors weighed elevated valuations against stimulus hopes.
- Stocks are poised to snap a six-day streak of gains that pulled major indexes to record highs on Monday.
- Bitcoin surged above $48,000 for the first time as momentum from Tesla’s $1.5 billion purchase charged on.
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US stocks slipped on Tuesday as investors weighed recovery optimism against the market’s climb to new highs.
The S&P 500 is poised to snap a six-day streak of gains that placed stocks at all-time highs on Monday. Bullish sentiments have been boosted by the Biden administration’s plans to push a large-scale stimulus package through Congress. Though President Joe Biden indicated throughout his campaign that he aims to work in a bipartisan fashion, his administration has warmed up to passing fiscal relief through reconciliation and without Republican support.
Hopes for fresh stimulus and the encouraging pace of COVID-19 vaccinations now square off with elevated valuations. Stocks have already charged to multiple record highs in February, placing more pressure on market participants to secure profits. Expectations for stronger inflation could also weigh on the growth stocks that lifted the market throughout 2020.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Tuesday:
- S&P 500: 3,905.80, down 0.25%
- Dow Jones Industrial Average: 31,290.62, down 0.3% (95.14 points)
- Nasdaq composite: 13,974.58, down 0.13%
Data tracking the US's recovery from the pandemic has also dragged on some optimism. Daily case counts have fallen to their lowest levels since the fall, signaling the dire winter wave is ending. Yet indicators tracking economic activity have yet to trend higher and still show the country mired in a downturn. The National Federation of Independent Businesses' survey of business-owner optimism fell 0.9 points last month to 95, according to a Tuesday release. The gauge has now reversed nearly three-quarters of its recovery.
Earnings season continues after the close with Twitter and Cisco slated to report quarterly figures. Goodyear gained in early trading after the tire manufacturer reported a quarterly profit and better-than-expected sales.
Glu Mobile surged after Electronic Arts agreed to a $2.4 billion acquisition. The deal bolsters EA's offerings in the mobile-gaming segment with titles including Design Home and Covet Fashion.
Tilray gained after announcing it inked a deal with Grow Pharma to distribute medical cannabis products in the UK. Pot stocks have thrived in 2021 amid hopes the US will federally decriminalize marijuana and rapidly expand the burgeoning market.
Bitcoin leaped even higher as momentum from Tesla's $1.5 billion purchase continued into its second day. The largest cryptocurrency rose above $48,000 for the first time before relinquishing some gains and stabilizing just above $46,000.
Spot gold rose roughly 1%, to $1,848.60 per ounce, at intraday highs. The US dollar weakened against a basket of Group-of-20 currency peers and Treasury yields wavered.
Oil from its highest prices in more than a year as the commodity's recovery rally sputtered out. West Texas Intermediate crude slid as much as 0.72%, to $57.55 per barrel. Brent crude, oil's international benchmark, fell 0.41%, to $60.31 per barrel, at intraday lows.