Stocks dipped on Tuesday, with the major indexes on track to close out August trading with another monthly gain.
The S&P 500 was slightly lower, pulling back after the Conference Board's closely watched monthly report on consumer confidence fell more than expected in August amid the Delta variant's spread. Both the S&P 500 and the Nasdaq had set fresh record intraday and closing highs during Monday's trading day, powered higher by a jump in heavily weighted Big Tech stocks.
The S&P 500 is on track to post a seventh straight monthly advance in August, pacing toward a 3% monthly gain and bringing its year-to-date rise to nearly 21%. The Nasdaq has outperformed with a gain of 4% so far in August as traders piled back into growth and technology stocks. Meanwhile, the Dow — which is heavy in cyclical stocks with earnings tied to the economic recovery — has underperformed, gaining 1.3% as concerns over the Delta variant surged in recent weeks.
Even given the S&P 500's march to all-time highs, many strategists have penciled in further gains.
BMO Capital Markets became the latest firm to raise its year-end price target on the S&P 500 on Monday. The company's chief investment strategist Brian Belski wrote in a new note that he now expects the index to end the year at 4,800 instead of 4,500. He cited the "blistering rate" of corporate earnings beats in the second-quarter, with the strengthening economic backdrop helping also drive profit growth at many companies.
The current policy environment has also been conducive to further gains in equities, other strategists have noted, given the Federal Reserve's still-accommodative policy tilt and the prospects of further government spending with the infrastructure and budget reconciliation bills being discussed in Congress.
The Fed's policy trajectory has been especially closely watched, as traders brace for the gradual easing of crisis-era supports like the central bank's $120 billion per-month asset purchase program. Still, key central bank officials including Fed Chair Jerome Powell have signaled they are waiting to monitor the incoming data and Delta variant's impact on the economy before charging ahead with a policy move.
"We do think that tapering, in general, will be a non-event, most likely because first, the market has had time to react throughout this year," James Liu, Clearnomics founder and CEO, told Yahoo Finance. "The Fed has done a great job telegraphing all this."
"Whether it's September or November for the announcement of taper will really depend on the jobs report coming up and some more economic data," he added. "But regardless, the market seems to expect it at this point. This is very different from 2013, when the market had to adjust very abruptly to taper."
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10:08 a.m. ET: Consumer confidence slid to the lowest level since February in August
The Conference Board's consumer confidence index disappointed against already lowered expectations in August, with the latest surge in the coronavirus stoking more concerns among consumers.
The firm's headline index fell to 113.8 in August, missing expectations for 123.0, according to Bloomberg data. That was down from 125.1 in July, which was also downwardly revised from the 129.1 previously reported.
Meanwhile, a subindex tracking consumers' expectations for the future slid to 91.4 in August from 103.8 in July. Consumers' assessments of present situations also deteriorated during the month.
"Concerns about the Delta variant—and, to a lesser degree, rising gas and food prices—resulted in a less favorable view of current economic conditions and short-term growth prospects," Lynn Franco, senior director of economic indicators at The Conference Board, said in a press statement. "Spending intentions for homes, autos, and major appliances all cooled somewhat; however, the percentage of consumers intending to take a vacation in the next six months continued to climb."
"While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead," Franco added.
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9:33 a.m. ET: Stocks open slightly lower
Here's where markets were trading just after the opening bell:
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S&P 500 (^GSPC): -3.86 (-0.09%) to 4,524.93
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Dow (^DJI): -34.25 (-0.1%) to 35,365.59
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Nasdaq (^IXIC): -23.48 (-0.15%) to 15,241.76
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Crude (CL=F): -$0.59 (-0.85%) to $68.62 a barrel
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Gold (GC=F): -$4.10 (-0.23%) to $1,808.10 per ounce
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10-year Treasury (^TNX): +0.6 bps to yield 1.29%
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9:00 a.m. ET: U.S. home prices increased by the most in three decades in June
U.S. home prices surged by the most in 30 years at the beginning of this summer as tight inventory levels and elevated demand combined to drag on affordability.
The S&P CoreLogic Case-Shiller national home price index jumped 18.6% in June over last year, accelerating from a 16.8% rise in May. This also marked a 13th straight month of accelerating price increases.
The firm's 20-city composite index, which tracks home price changes across 20 major metropolitan areas, grew 19.08% in June compared to last year, also accelerating from May's 17.14% rise. Consensus economists were looking for this metric to rise by 18.6%, according to Bloomberg data.
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7:15 a.m. ET Tuesday: Stock futures drift sideways
Here's where markets were trading Tuesday morning:
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S&P 500 futures (ES=F): +0.00 points, or unchanged at 4,525.25
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Dow futures (YM=F): +9 points (+0.03%) to 35,361.00
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Nasdaq futures (NQ=F): -6 points (-0.04%) to 15,591.50
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Crude (CL=F): -$0.59 (-0.85%) to $68.62 a barrel
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Gold (GC=F): +$2.90 (+0.16%) to $1,815.10 per ounce
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10-year Treasury (^TNX): +0.8 bps to yield 1.292%
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6:06 p.m. ET Monday: Stock futures rise
Here were the main moves as the overnight session kicked off Monday evening:
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S&P 500 futures (ES=F): +3.75 points (+0.08%) at 4,529.00
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Dow futures (YM=F): +31 points (+0.09%) to 35,383.00
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Nasdaq futures (NQ=F): +6.5 points (+0.04%) to 15,604.00
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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August 31, 2021 at 09:11PM
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