Stocks Dip Even With Traders Hopeful For September Rate Cut; Bonds Extend Rally, Oil Plummets: What's Driving Markets Tuesday?

Author: Piero Cingari | June 04, 2024 01:00pm

Growth concerns dragged stocks lower on Tuesday, with all major indices trading in the red as investors took a cautious tone on riskier assets.

The S&P 500 faced selling pressure when attempting to break above 5,300 levels. It traded down 0.4% by midday in New York.

Major large-cap indices showed only marginal dips and small caps felt the brunt of the selloff while the iShares Russell 2000 ETF (NYSE:IWM) was down 1.4%.

On The Macro Front

Tuesday witnessed further indication of a potential slowing economic momentum, as already surfaced last week and on Monday.

The number of job openings in April fell sharply by 296,000, reaching the lowest level since February 2021 and missing expectations.

In response, traders increased their bets on a Federal Reserve rate cut in September. The CME Group Fed Watch tool now shows a 65% chance of a cut, up significantly from 46% last week.

The prospect of lower interest rates boosted bond prices, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) rising 1%, on track for its fourth consecutive gain.

This rally benefited interest-rate sensitive stocks like real estate, which outperformed in the S&P 500.

Commodities took a tumble, with cyclical plays like copper, silver, and crude oil down 3%, 4% and 1.5%, respectively.

Oil prices are now down for five straight days, with the WTI trading at about $72 a barrel and heading to the lowest close in four months.

Bucking the overall bearish sentiment, Bitcoin (CRYPTO: BTC) surged 3%, breaking above $70,000.

Tuesday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day (% Chg)
Dow Jones	38,491.46	-0.2%
Nasdaq 100	18,541.04	-0.3%
S&P 500	5,261.48	-0.4%
Russell 2000	2,031.81	-1.4%

Updated at 12:15 p.m. ET

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.5% lower to $525.
The SPDR Dow Jones Industrial Average (NYSE:DIA) fell 0.2% to $385.46.
The tech-heavy Invesco QQQ Trust (ARCA: QQQ) fell 0.4% to $451.41
Sector-wise, the Real Estate Select Sector SPDR Fund (NYSE:XLRE) outperformed, up by 0.9%, while the Materials Select Sector SPDR Fund (NYSE:XLB) lagged, down 1.6%.

Tuesday’s Stock Movers

Saia Inc. (NASDAQ:SAIA) surged over 7% on strong less-than-truckload (LTL) shipment growth. The company reported an 18% increase in LTL shipments per workday in April year-over-year, and an even stronger 18.6% increase in May year-over-year.
Carnival Corp. (NYSE:CCL) jumped over 4% on Tuesday after the company announced a strategic move to absorb the P&O Cruises Australia brand into Carnival Cruise Line starting in 2025. Industry-peer Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) rose 3%.
Crypto-related stocks including Coinbase Global Inc. (NASDAQ:COIN) and Marathon Digital Holdings Inc. (NASDAQ:MARA) rose by 5.6% and 6.5% respectively, amid improving Bitcoin price momentum.
Energy-linked corporates faced losses amid weaker oil prices. Exxon Mobil Corp. (NYSE:XOM) fell 2.3%, while Chevron Corp. (NYSE:CVX) eased 1.5%.
Bath & Body Works Inc. (NYSE:BBWI) tumbled 13% in reactions to the company’s quarterly results.
Other stocks reacting to earnings were Ferguson plc (NYSE:FERG) down 2%, Core & Main Inc. (NYSE:CNM) down 16% and Donaldson Company Inc. (NYSE:DCI), up 1%.
Companies scheduled to report after the close include CrowdStrike Holdings Inc. (NASDAQ:CRWD), Hewlett Packard Enterprise Company (NYSE:HPE) and Guidewire Software Inc. (NYSE:GWRE).