U.S. stocks wiped out earlier gains and turned negative gained on Tuesday as the market struggled for a direction.
The S&P 500 last traded 0.2% lower, dragged down by the energy sector. The tech-heavy Nasdaq Composite dipped 0.2%. The Dow Jones Industrial Average traded 60 points lower.
Big Tech shares Amazon, Apple, Netflix and Alphabet all erased earlier advance and dipped into negative territory. Amazon shares came under pressure after an attorney general filed an antitrust lawsuit over the e-commerce giant’s pricing.
Airlines and cruise lines provided the broader market with some support. United Airlines jumped 3% after the carrier said yields on domestic leisure tickets purchased this month topped 2019 levels amid the reopening. Boeing also gained 1.7%. Norwegian Cruise Line and Royal Caribbean rose more than 4% each.
“The market is basically in a holding pattern until the next big event, which is the Fed’s tapering schedule (or not tapering schedule),” Tom Essaye, founder of Sevens Report, said in a note. “Until we have more clarity on Fed tapering and the longer-term outlook for inflation, we should expect this type of incremental volatility.”
Bitcoin’s recent rout, which has hit tech stocks like Tesla and dented overall investor sentiment, stabilized on Monday. The cryptocurrency was back near $38,000 early Tuesday after falling below $32,000 at one point on Sunday. Crypto prices rebounded as Elon Musk said he was having discussions with bitcoin miners regarding sustainability.
Tesla, a big holder of bitcoin, fell 1.5%. Crypto-exchange Coinbase gained 4% with the shares also getting a boost from a JPMorgan buy call.
Monday “was driven by inflation anxiety relief,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “Evidence that inflation fears were calming in the bond and commodity markets began to drive the stock market late last week and has continued into today.”
“Growth stocks including technology have regained leadership as yield and inflation fears ease,” Paulsen added.
After Monday’s gain, the S&P 500 is now in the green for the month of May. The S&P 500 is down only about 1% from its record hit earlier this month before a pullback.
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