Wall Street Experiences a Retreat: Energy and Finance Among the Worst Performers

At the end of the trading day on Tuesday, US Stocks dipped further below following the financial and energy sectors retreat largely outweighing the technology sector rise. While the US Crude Oil CLc1 prices fell below the $50 a barrel mark the SPNY energy sector’s 1.31 percent dip rendered it among the worst performing stocks among the most powerful S& P 500 sectors. Also, Exxon Mobil Corporation (NYSE: XOM) was reported with a fall of 0.6%.

Adding to that, the other contributor that heavily impacted the Wall Street performance this Tuesday was the financial sector that fell down to 0.8% and contributed to the overall dip. The two largest drags among the financial sector companies on the S&P 500, the Bank of America (BAC.N) fell by 1.4 % and the JPM.N or JP Morgan reported a dip of 1.7%. As the figures reveal, the declining stocks greatly outnumbered the positive performers by a ratio of 1.58-to-1 on the NYSE.

Theimpact on the Inflation

Among other changes noted in the US market, there was a record highest increase in consumer spending in the last four months causing a rebound in the monthly inflation in April. The inflation highlighted the increasing domestic demand and the need for the Federal Reserve to escalate the interest rates in the country.

Highlighting the current status of the US markets, the Global Markets Advisory Group’s senior strategist in New York said that despite the political and geopolitical risks to the market, the economy in the country in terms of income is exactly where the investors would want it to be. He further added that the market is currently moving in an upright position with the investor neither eyeing the equities as their target for investment, nor being in a massive rush to invest more in Treasuries.

In an interview with CNBC, the Fed Head in Dallas, Robert Kaplan stated that although the recent economic data was a little concerning, two more rate hikes are on the cards for this year. That being said, the Fed Governor, Lael Brainard added that although a hike is likely to happen soon enough, the central bank might want to wait it out for as long as the inflation stays as sluggish as it is. As per the data provided by Thomson Reuters, the traders can expect an 86.6 % chances of witnessing a quarter point hike being announced at the monthly Fed meeting in June this year.

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