U.S. stocks fell for the first time in six days on Tuesday ahead of quarterly earnings reports from several megacap technology companies.
The Dow Jones Industrial Average declined 240 points. The S&P 500 fell 0.5% and the Nasdaq Composite dipped 0.3%. The major averages are all slipping from their respective records reached in the previous session, on track to break their five-day winning streaks.
Shares of UPS tumbled more than 8% as the shipping company’s domestic revenue came up shy of estimates. UPS beat on the top and bottom lines, however, as a surge in e-commerce orders continued.
Tesla erased earlier gains and fell 1.5% following a better-than-expected second-quarter earnings report. The electric vehicle maker passed $1 billion in quarterly net income for the first time.
The sell-off on Wall Street followed yet another day of heavy losses in Asian markets. The Hang Seng index dropped more than 4% Tuesday amid Beijing’s intensified crackdown on tech and education companies.
Investors are awaiting the Federal Reserve’s update on its monetary policy as the central bank’s two-day meeting began. The Federal Open Market Committee will release a statement when the meeting concludes Wednesday, followed by Chairman Jerome Powell’s news conference.
“I empathize with Fed Chair Jay Powell as he walks a delicate tightrope — preparing markets for tapering while assuring that the Fed will be very patient and thoughtful as it starts its normalization process,” Invesco Chief Global Market Strategist Kristina Hooper said in a note.
The International Monetary Fund warned Tuesday that there’s a risk inflation will prove to be more than just transitory, pushing central banks to take pre-emptive action.
“It appears that we’re going to get really solid earnings from these companies and that should give a little bit of a boost to the market. Some of these names have already run so much this year that perhaps we don’t get a large bounce,” said Victoria Fernandez, Crossmark Global Investments’ chief market strategist.
“Apple may be your best opportunity to see some movement because they’ve been in more of a consolidation phase over the last few months,” Fernandez added.