- The drop in US stocks deepened in the final hour of trading on Tuesday, indicating that the Federal Reserve's fight against inflation was far from over. Investors bought the dip in short-term US bonds.
- The 1.2% drop in the S&P 500 Index sent the benchmark below its average price over the last 50 days for the first time in more than three months, halting a momentum streak that was the longest by this metric since September 2020.
- The Nasdaq 100 fell 1.0% after US retail sales rose more than expected, indicating that the economy can support higher rates and potentially deter policymakers from a policy shift. Financials weighed on the US market following Fitch's warning that the ratings firm may downgrade larger lenders such as JPMorgan or Bank of America, while Discover Financial Services was the worst performer following the resignation of its CEO.
- Investors are growing wary that consumer-facing companies will be able to maintain their pricing power for much longer as the lagged effects of the Fed’s policy tightening take hold.
