Dow Slumps 240 Points On Concerns the Market’s Rally Has Gotten Overextended.
The stock market’s triumphant rally into positive year-to-date territory retreated on Tuesday as investors took profits and weighed whether recent gains match the pace of the ongoing economic recovery.
Stocks that led recent sessions’ upswings including Carnival Cruises, United Airlines, and Simon Property Group declined. That comes after travel and retail stocks tore higher on Monday as investors speculate on smooth reopenings throughout the US and a pickup in consumer demand.
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 surrounding the coronavirus pandemic, and the National Bureau of Economic Research officially stating the US entered recession in February.
Experts sounded the alarm on stocks’ soaring prices throughout recent weeks. Many warned the 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 specifically targeting bankrupt firms including Hertz and JCPenney to benefit from strong volatility.
Oil prices slightly fell 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, leading investors to prepare for a potential policy reveal after the two-day session ends. Experts largely expect the central bank to maintain its pledge to keep rates at historic lows and avoid implementing additional easing measures.
Source: Business Insider. Create Your Trading Account!
Originally published at https://www.egmanalytics.com on June 9, 2020.