Dow slumps 240 points on concerns that the market's rally has gotten overextended
- US equities fell on Tuesday as investors mulled the S&P 500's rally into positive year-to-date territory and weighed whether prices matched hopes for economic revival.
- Travel and retail stocks slipped after leading indexes higher on Monday.
- Oil prices continued to skid, even after OPEC agreed over the weekend to extend production cuts.
- Watch major indexes update live here.
The stock market's triumphant rally into positive year-to-date territory retreated on Tuesday as investors took profits and weighed whether recent gains matched the pace of the economic recovery.
Stocks that led recent sessions' upswings — including Carnival Cruises, United Airlines, and Simon Property Group — declined. Travel and retail stocks tore higher on Monday as investors bet on smooth reopenings throughout the US and a pickup in consumer demand.
Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Tuesday:
- S&P 500: 3,202.38, down 0.9%
- Dow Jones industrial average: 27,274.98, down 1.1% (297 points)
- Nasdaq composite: 9,899.17, down 0.3%
The S&P 500 erased its 2020 losses in the final minutes of Monday trading, notching a milestone after several turbulent months for equities investors. The rally arrived amid nationwide police-brutality protests, lasting concerns about the coronavirus pandemic, and the National Bureau of Economic Research's statement on Monday that the US entered recession in February.
Experts have sounded the alarm about stocks' soaring prices throughout recent weeks. Many have said that a second wave of coronavirus cases could pull equities back into bearish territory, while others highlighted looming bankruptcy risks as markets' next hurdle. Investors largely looked past such fears, with many targeting bankrupt firms including Hertz and JCPenney to benefit from strong volatility.
Oil prices fell slightly after early gains to stabilize near levels reached after OPEC's weekend meeting. West Texas Intermediate crude fell as much as 2.9%, to $37.07 per barrel. Brent crude, oil's international standard, sank 2.3%, to $39.85 per barrel, at intraday lows.
The Federal Open Market Committee's June meeting kicks off Tuesday, and investors are preparing for a policy reveal after the two-day session. Experts largely expect the central bank to maintain its pledge to keep rates at historic lows and avoid implementing additional easing measures.
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