Investing.com – Wall Street traded down on Tuesday with stocks registering their biggest percentage drop since last October as investor sentiment soured.
At 12:47PM ET (16:47GMT), the Dow Jones fell 175 points, or 0.84%, the S&P 500 lost 21 points, or 0.90%, while the Nasdaq Composite traded down 74 points, or 1.26%.
Experts pointed to concerns over the fact that U.S. President Donald Trump’s fiscal policies were priced into markets, but still seemed a ways away. Trump had indicated the repeal and replacement of Obama’s Affordable Care Act would take priority over promises for his “phenomenal” tax reform.
News reports suggested that Republicans were having a difficult time agreeing on amendments to the bill in order to win more support from their party amid strong opposition from Democrats.
Amid the uncertainty for progress on fiscal policies, investors appeared to enter risk off mode and financial stocks took a beating with Bank of America (NYSE:BAC) leading the S&P 500 lower with losses of more than 5%.
In earnings, Lennar (NYSE:LEN) saw shares sink 2% as the homebuilder’s gross margin on sales fell 160 basis points to 21.1%.
General Mills (NYSE:GIS) dropped by less than 1% after the maker of Cheerios reported that sales fell for a seventh consecutive quarter, missing consensus, though pro forma earnings-per-share of $0.72, beat expectations by a penny.
FedEx (NYSE:FDX) and Nike (NYSE:NKE) are among firms that will release their own numbers after the market close.
In other headlines, Microsoft (NASDAQ:MSFT) and Adobe Systems (NASDAQ:ADBE) announced an agreement to join their sales and marketing software products in a move to become more competitive with rivals such as Salesforce.com (NYSE:CRM) or Oracle (NYSE:ORCL).
Google (NASDAQ:GOOGL) promised to increase its vigilance to avoid placing YouTube ads on videos with hate-filled content and had revamped its policies to give advertisers more control. The move came after several U.K. firms pulled ads that had been placed next to videos with homophobic or anti-Semitic content.
On a very light day for economic data, the U.S. current account deficit unexpectedly fell in the fourth quarter, hitting its lowest level in more than a year.
Still ahead, market players awaited comments from a number of Fed policymakers for more clues on the timing of the next U.S. rate hike.
Earlier on Tuesday, New York Fed president William Dudley steered away from comments on monetary policy, focusing instead on the need for better bank incentives in order to reform their internal culture.
Minneapolis Fed chief Neel Kashkari, the lone dissenter in the last policy decision based on his preference to keep rates on hold, took to his twitter account for a Q&A. Essentially, Kashkari repeated his preference for “clear progress towards our dual mandate goals”, commenting that core PCE has been at 1.7% “for months” and suggesting that the labor force participation rate still needs to improve.
He did however recognize his preference for the Fed to publish their plan for the normalization of the balance sheet as soon as possible to give markets plenty of time to digest the information.
Kansas City Fed president Esther George noted that the Fed was moving into a critical time and suggested that more people will be talking about the central bank’s balance sheet.
Cleveland Fed chief Loretta Mester and Boston Fed president Eric Rosengren were also scheduled to make public appearances after the market close on Tuesday. Fed chair Janet Yellen speaks on Thursday.
Markets have priced in the possibility for a second rate hike to arrive this year in July, though the chances for a third move by the end of the year hovered around 50%, according to Investing.com's Fed Rate Monitor Tool.
Meanwhile, oil prices traded lower as the market discounted the latest talk by OPEC that it would extend output cuts beyond June and investors looked forward to latest weekly data on U.S. crude inventories to be released later on Tuesday by the American Petroleum Institute.
U.S. crude futures lost 1.17% to $48.34 by 12:50PM ET (16:50GMT), while Brent oil traded down 0.93% to $51.14.