Stock market down Tuesday because the renewed drop of commodities price. The Dow Jones Industrial Average slipped 0.23% to 17,190.03. The S&P 500 declined 0.54% to 2,008.76. The Nasdaq Composite was down 0.61% to 4,721.14. Crude oil price decreased 2.99% to $36.07, gold price declined 1.10% to $1231.40, silver price down 1.42% to $15.30.
Investors were cautious amid a two-day meeting by Federal Reserve officials, which starts Tuesday. While nothing changes in monetary policy is expected, investors will carefully watch the bank’s policy statement and economic projections, and Chairwoman Janet Yellen’s conference on Wednesday.
“The market and the Fed are worlds apart when it comes to what they predict about interest rates,” said Johan Javeus, chief strategist at SEB.
When the Fed hiked rates in December, officials projected another four rate increases in 2016. However, markets are pricing in a approximately 50% chance of a rate increase in June, and a almost 75% chance of a hike by December, according to Fed-funds futures.
“The more the Fed adjusts to the market, the more optimistically the message will be received,” Mr. Javeus said.
While he sees some recovery of oil prices and reassurance about China’s economy, “nothing is growing at its long term pace, including corporate earnings, global gross domestic product, industrial production and global trade,” he said.
Stock market have been through a recovery during last month. Overall, the S&P 500 increased approximately 8% which surged by raising U.S. economic data and relative stable in commodities prices.
Even the recent recovery, asset managers keep grapple with investors who continue to favor investment products that track an index over those in which a human picks bonds, stocks and other securities products which usually take along higher fees. According to data released Tuesday from mutual-fund research firm Morningstar, Inc. (NASDAQ: MORN), investors pulled $9.5 billion from actively managed funds during February. That brought outflows from active funds to $268.3 billion over the last year, while passive funds brought in $23 billion last month and close to $382 billion over the last 12 months, the data show.