Stocks recovered some of their losses as defensive equities outperformed technology stocks after Snap Inc. issued a profit warning.
The S&P 500 recovered from session lows thanks to advances in utilities and consumer staples. The Nasdaq 100, a tech-heavy index, underperformed. Snapchat's owner saw a 40% drop in value, leading to a drop in the value of companies that rely on digital advertising. After a poor report on new house sales in the United States, homebuilders took a hit. Separate data revealed that corporate activity had slowed. Bond prices increased.
Treasurys rose as investors sought safe haven assets, as the Federal Reserve slowed its projected rate hikes. The yield on two-year notes declined 16 basis points to 2.46 percent. Money-market traders expect the central bank to raise rates by approximately 135 basis points during the next three policy meetings, down from roughly 141 basis points at Monday's closing.
President of the Federal Reserve Bank of Atlanta, Raphael Bostic, a dovish policymaker, urged his colleagues to proceed with caution. The Fed hiked interest rates by 50 basis points earlier this month, and chair Jerome Powell indicated that comparable adjustments will be made at its June and July meetings, a plan that both hawks and doves have already endorsed to cool the highest inflation since the 1980s.
