Stocks fell across the board Tuesday as the Dow traded 192 points lower and the S&P 500 and Nasdaq saw respective drops of .9% and 1.5%. The most likely culprit of this small slide is the Fed tempering expectations of prospective rate cuts. After the Fed met last week and decided to keep interest rates at 2.25-2.5%, many, including participants in the meeting, believed rate cuts would come in July. That however, may no longer be the case. Fed Chairmen, Jerome Powell, said the Fed will take a cautious “wait and see” approach given the recent market volatility.
This uncertainty was reflected in the Consumer Confidence number, which hit its lowest level since September 2017, coming in at 121.5. This low number likely stems from all the mixed signals consumers are receiving. In a quote on CNBC, Mark Haefele, Chief Global Investment Officer at UBS Global Wealth Management said, “Bond markets appear to be signaling an economic slowdown, while equities suggest growth will continue in a low inflation Goldilocks scenario”.
July is approaching quickly, and hopefully it will bring some stability and answers with it.
E-Mini S&P 500 Sep ’19 Daily Chart