Stocks ended mixed on Tuesday, with the S&P 500 and Dow Jones falling slightly and the Nasdaq rising, a day after a host of concerns in China and Washington that caused risky assets to sell off sharply.

Traders also turned their attention to the start of the Federal Reserve’s final two-day monetary policy-making meeting, where the central bank is expected to give hints on reducing its massive stimulus that helped to contain the worst economic effects of COVID-19.

On Monday, the Dow Jones closed more than 600 points lower, or about 1.8%, while the Nasdaq lost more than 2%. Fears of financial contagion that could ensue if China’s biggest real estate developer, China Evergrande, defaults due to its massive debt burden was a major concern for investors early in the year. week, triggering a global equity rout that put the S&P 500 on track. for its third consecutive weekly decline.

This built on concerns earlier this month as Wall Street experts downgraded economic growth and earnings expectations for the remaining months of the year.

And this week, investors face additional uncertainty over debates in Washington to raise the US debt ceiling to prevent a government shutdown and US government defaults on federal payments, and avoid what Secretary of the Treasury Janet Yellen said would become a “generalized economic disaster”.

The U.S. Federal Open Market Committee (FOMC) on Wednesday is expected to make its latest monetary policy decision, which should show the Federal Reserve to announce the timing of its plan to begin scaling back its purchasing program. assets that had helped support the economic recovery.

Nonetheless, a number of equity strategists have offered an optimistic stance despite the risks.

“The markets are clearly worried about the potential ripple effects of Evergrande, as well as some nervousness over the September FOMC meeting. We are in the camp that we await a correction,” Cliff Hodge, chief investment officer of Cornerstone. Wealth, wrote in an email. Monday evening. “For the moment, we do not fear a stock market crash. The Fed and Evergrande are not new. The market has known them for a few weeks in the case of Evergrande and for a few months now for the Fed.”

“The sentiment is too bearish and the institutions are well protected before these events,” he added. “Markets don’t crash when everyone expects them. They collapse when everyone is crowded and in demand for a long time. “

Others adopted a similar tone.

“I think what people are missing if you lean into this with a sell button is the fact that the economy is still expanding. Yes, it has slowed down from the peak in late spring and early summer, but we still have an economic expansion that’s likely to take hold here, ”Jason Ware, chief investment officer for Albion Financial Group, told Yahoo Finance Live on Monday afternoon.

“We have a working economy, we have record profits that we’re going to achieve this year, we have a Fed that’s still in full hosting mode – and besides, at their meeting this week, they’re probably going discuss what is happening in China [as] just another reason they don’t go down this month, “he added.” And then finally we have a tax authority that always wants to stimulate the economy with spending. ”

4:06 PM ET: Stocks end mixed after Evergrande losses; Nasdaq leads with 0.2% gain

Here are the main moves in the markets at 4:06 p.m. ET:

  • S&P 500 (^ GSPC): -3.54 (-0.08%) to 4,354.19

  • Dow (^ DJI): -50.63 (-0.15%) to 33,919.84

  • Nasdaq (^ IXIC): +32.49 (+ 0.22%) to 14,746.40

  • Raw (CL = F): + $ 0.22 (+ 0.31%) to $ 70.51 per barrel

  • Gold (CG = F): + $ 11.40 (+ 0.65%) to $ 1,775.20 per ounce

  • 10-year cash flow (^ TNX): +1.5 bps for a yield of 1.3240%

12:50 p.m. ET: Any further decline in stocks is likely to be “very, very shallow”: strategist

All three major indexes started the week extending a decline from September, returning gains after a seven-month winning streak.

“I think we had to go through some kind of market correction,” Ryan Payne, president of Payne Capital Management, told Yahoo Finance Live on Tuesday. “I think we could see more sales here, but I don’t know how bad it’s going to be.”

“If you think about what’s going on with the economy right now, what’s going on with corporate profits – companies are going to continue to be very, very profitable next year,” he added. . “The economy is still going to be relatively warm next year.”

“And in the meantime, the world is inundated with so much money… it’s crazy how much money there is right now,” Payne said. “From my point of view, this money is either going to be spent in the economy, which is great for profits, or you have to get a return on your money, because inflation is real right now. increased inflation – sitting in cash just isn’t an option. So I think you’re going to see a lot more money flowing into the stock market here, which tells me that this correction or this sell is going to be very, very superficial. ”

11:00 a.m. ET: Stocks erase past gains, trading near the flat line

All three major indices erased earlier gains around 11 a.m. in New York City, as lingering concerns over China Evergrande and the underlying backdrop weighed on the recovery.

The materials, energy and industrials sectors lagged behind the S&P 500, pulling the index just a notch below the flat line. The Dow lost less than 20 points, or around 0.1%, as both Caterpillar and Dow underperformed for another session. The 30-stock index had previously risen more than 300 points at the session’s high.

Treasury yields stabilized after gaining on Monday, and the benchmark 10-year bond yield hovered just above 1.3%.

9:30 a.m. ET: Stocks open to the upside

Here’s where the markets were trading at the opening bell:

  • S&P 500 (^ GSPC): 4,379.46, +21.73 (+ 0.50%)

  • Dow (^ DJI): 34,145.84, +175.37 (+ 0.52%)

  • Nasdaq (^ IXIC): 14,790.44, +76.54 (+ 0.52%)

  • Raw (CL = F): $ 70.78 per barrel, + $ 0.49 (+ 0.70%)

  • Gold (CG = F): $ 1,773.60 per ounce, + $ 9.80 (+ 0.56%)

  • 10-year cash flow (^ TNX): flat, yielding 1.311%

8:30 a.m. ET: Residential construction resumes

Housing starts rose 3.9% at a seasonally adjusted annual rate of 1.615 million units in August, according to new data published by the US Department of Commerce. The results exceeded analysts’ expectations by 1.55 million units, according to the Bloomberg consensus. July housing starts were revised to 1.554 million units from 1.53 million. Meanwhile, building permits in August rose 6% above the 1.63 million units revised a month earlier to 1.728 million units.

“The pace of new construction reflects the move by home builders towards higher margin projects in a context of fluctuating costs,” said George Ratiu, director of economic research for Realtor.com, in a press release after the results. traffic of buyers and sales, builders sought permits for more multi-family projects. However, this week’s September sentiment numbers show a rebound is underway, as residential construction companies resolve their backlog and expect traffic to increase by 2022. “

7:20 a.m. ET Tuesday: Stock futures rise, recouping some of Monday’s losses

Here’s where the markets were trading on Tuesday morning:

  • S&P 500 Futures Contracts (ES = F): +34.75 points (+ 0.8%), at 4,383.00

  • Dow Futures (YM = F): +293 points (+ 0.9%), at 34,132.00

  • Nasdaq Futures (NQ = F): +109 points (+ 0.73%) to 15,118.50

  • Raw (CL = F): + $ 0.73 (+1.04%) to $ 71.02 per barrel

  • Gold (CG = F): + $ 3.50 (+ 0.2%) to $ 1,767.30 per ounce

  • 10-year cash flow (^ TNX): +1.9 bps for a yield of 1.328%

6:15 p.m. ET Monday: Stock futures trading is mixed after massive sell-off

Here are the main movements on the markets as of Monday evening:

  • S&P 500 Futures Contracts (ES = F): -73 points (-1.65%), to 4,348.75

  • Dow Futures (YM = F): +16 points (+ 0.05%), at 33,855.00

  • Nasdaq Futures (NQ = F): +3.25 points (+ 0.02%) to 15,012.75

NEW YORK, NEW YORK – SEPTEMBER 16: People sit near the New York Stock Exchange (NYSE) on September 16, 2021 in New York City. Despite an increase in retail sales, the Dow Jones fell on Thursday as investors continue to have concerns about the Delta variant and news of a slight increase in jobless claims. (Photo by Spencer Platt / Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter



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