Markets closed in the red on Tuesday after Treasury yields declined in the last few minutes of trading. President Donald Trump criticized the Fed and stated that the central bank should consider deeper rate cuts. The three major benchmarks closed in the red.
The Dow Jones Industrial Average decreased 0.7%, to close at 25,962.44. The S&P 500 decreased 0.8% to close at 2,900.51. The tech-laden Nasdaq Composite Index closed at 7,948.56, losing 0.7%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.2% to close at 16.34. Decliners outnumbered advancers on the NYSE by a 1.39-to-1 ratio. On Nasdaq, a 1.61-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow dipped 173.4 points to close in the red. Shares of American Express (NYSE:AXP) fell 2.4% and weighed on the 30-stock index. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, shares of The Home Depot, Inc. (NYSE:HD) jumped 4.4% after posting better-than-expected earnings results for second-quarter fiscal 2019, retaining its beat streak of more than five years. (Read More)
The S&P 500 fell 23.1 points to end in negative territory. Of the 11 major sectors of the S&P 500, 10 ended in the red, with financials leading the decliners. The rout in the financial sector was triggered after Treasury yields declined. The Financial Select Sector SPDR Fund (XLF) fell 1.3% on Tuesday.
Meanwhile, the Nasdaq slid 54.3 points to also close in the red. Shares of Apple (NASDAQ:AAPL) fell 0.9% and weighed on the Nasdaq.
Trump Criticizes the Federal Reserve
Speaking from the White House, alongside the president of Romania, President Donald Trump on Aug 20 criticized the Fed yet again. Trump said, “If the Fed would do its job, we’d have a tremendous spurt of growth.” He reiterated that the Fed should consider reducing the benchmark interest rates by as much as 1%.
Trump also stated that his administration was looking at tax cuts which might include slashing payroll taxes. The Washington Post had reported late on Monday that the administration was considering introducing a temporary payroll tax cut. However, the White House stated that such an arrangement wasn’t under any consideration.
Meanwhile, Trump did not put any time frame as to when the tax cuts would be introduced. He rather stated, "payroll taxes is something I have been thinking about. Many people would like to see that.
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