The stock market was mixed Tuesday as markets monitor House Speaker Nancy Pelosi’s trip to Taiwan.
In midday trading, the Dow Jones Industrial Average had fallen 219 points, or 0.7%, while the S&P 500 had dropped 0.1%, and the Nasdaq Composite had risen 0.4%. All three indexes were down earlier in the trading session.
Pelosi landed on Tuesday in Taiwan, a move that potentially raises tensions between the U.S. and China. That makes the stock market nervous, as trade relations between the two largest economies broke down under President Trump.
“There was some concern …as Nancy Pelosi was making her way to Taiwan,” wrote Michael Reinking, senior market strategist at New York Stock Exchange. Initially, “This weighed on global markets.”
Also, Mary Daly, the president of the San Francisco Fed, said that the central bank is nowhere near finished fighting inflation and that the Fed is likely to raise rates and keep them high for a while.
That sentiment is a reversal from what had sent the stock market upward recently.
The S&P 500 had gained 13% from its intraday low of the year hit in mid-June through Monday’s close, as markets bet that the Federal Reserve will slow down the pace of its interest rate hikes as signs emerged that inflation has peaked.
This week, the stock market had already been growing cautious about the Fed—and higher stock prices—ahead of key economic data. If Friday’s July jobs report shows more jobs added than expected and if next week’s consumer price index report shows higher-than-expected inflation, markets will once again expect the Fed to become more hawkish. That would send stocks tumbling.
Now, the market is hitting a point where it has had trouble surpassing recently. With the S&P 500 trading at just over 4100, sellers have come in to knock the indexes down several times since the end of May. Strategists at Credit Suisse note that, should the index rally up to 4200, heavy resistance—or selling pressure—should kick in at that level.
“Chasing the market here is tougher,” wrote Dennis DeBusschere, founder of 22V Research. “Expect consolidation.”
That is because “the market is too aggressively pricing in rate cuts next year,” wrote Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
Here are some stocks on the move Tuesday:
BP gained 1.9% as the group became the latest oil giant to report its best quarter in years amid soaring energy prices. BP saw adjusted profit surge to $8.5 billion in the prior quarter, up from $2.8 billion in the year prior and well ahead of analysts’ expectations.
Taiwan Semiconductor Manufacturing Co. (TSM) rose 0.4% after a 2.5% tumble Monday, as shares in the world’s largest chip maker weakened ahead of Pelosi’s visit to Taiwan.
DuPont de Nemours (DD) slipped 1.6%, even after the materials science giant reported second-quarter adjusted profit per share of 88 cents from $3.3 billion in sales, outpacing Wall Street’s expectations of 75 cents in per-share profit from revenue of $3.25 billion.
Caterpillar (CAT) stock dropped 4.9% after the company reported a profit of $3.18 a share, beating estimates of $3.03 a share, on sales of $14.2 billion, above expectations of $14 billion.
Pinterest (PINS) stock gained 12% after the company reported a profit of 11 cents a share, missing estimates of 18 cents a share, on sales of $665.9 million, above expectations for $664.7 million.