© Reuters. FILE PHOTO: American flags hang on the facade of the New York Stock Exchange (NYSE) building after the trading session begins on Thursday in Manhattan in New York City, New York, the United States, Jan. 28, 2021. REUTERS / Mike Segar / File Photo
By Stephen Culp
NEW YORK (Reuters) – Wall Street lost ground Tuesday as economic uncertainties and the increasing likelihood of a corporate tax hike dampened investor sentiment and sparked a wide sell-off despite signs of easing inflation.
Optimism faded throughout the session, reversing an initial rally following the Labor Department’s consumer price index report. All three major US stock indices ended in negative territory as a reminder that September is a historically difficult month for stocks.
So far this month the price has fallen by almost 1.8%, although the benchmark index has gained over 18% since the beginning of the year.
“Chances are the market is simply ready to go through an overdue correction,” said Sam Stovall, chief investment strategist at CFRA Research in New York. “From a seasonal perspective, September tends to be the window of opportunity for fund managers.”
The advent of the highly contagious Delta COVID variant has increased bearish sentiment regarding the recovery from the global health crisis, and many now expect a significant correction in equity markets by year-end.
“We’re still in a correction mode that people have been asking for months,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “Economic data points lacked estimates, and that coincided with the rise in the delta variant.”
The CPI report returned a sub-consensus August reading, a slowdown that confirms claims by Federal Reserve Chairman Jerome Powell that inflation spikes are temporary and allayed market fears that the central bank will come sooner than expected will start tightening monetary policy.
US Treasury bond yields fell on the data pushing financials and investor love returned to growth at the expense of value. [US/]
Long-awaited corporate tax hikes to 26.5% from 21% if Democrats prevail are nearing realization as President Joe Biden’s $ 3.5 trillion budget package moves closer to adoption.
That fell by 292.06 points or 0.84% to 34,577.57; the S&P 500 lost 25.68 points, or 0.57%, to 4,443.05; and that dropped 67.82 points, or 0.45%, to 15,037.76.
All 11 major sectors of the S&P 500 ended the session in the red, with energy and financials taking the largest percentage drops.
Apple Inc (NASDAQ 🙂 unveiled its iPhone 13 at its largest product launch event of the year and added new features to its iPad and Apple Watch gadgets as the company faces increased court scrutiny for its business practices. Its stocks closed 1.0% and were the strongest resistance for the S&P 500 and Nasdaq.
intuition Inc (NASDAQ 🙂 gained 1.9% after TurboTax maker announced it was taking over digital marketing company Mailchimp for $ 12 billion.
CureVac slumped 8.0% after the German biotech company canceled manufacturing contracts for its experimental COVID-19 vaccine.
Declining issues outweighed increasing issues on the NYSE by a ratio of 2.25 to 1; on the Nasdaq favored a ratio of 2.40 to 1 relegated.
The S&P 500 posted two new 52-week highs and two new lows; the Nasdaq Composite posted 50 new highs and 107 new lows.
The volume on the US stock exchanges was 10.07 billion shares, compared with 9.38 billion on average over the last 20 trading days.