US stocks wobbled on Tuesday and the Dow fell for a fourth day as major averages struggled to recover from a bout of strong selling.
The Dow Jones Industrial Average fell 84.96 points to 32,160.74, or 0.26%. The S&P 500 rose 0.25% to 4,001.05, and the Nasdaq Composite gained 0.98% to close at 11,737.67.
The market struggled to choose a direction on Tuesday in an erratic trading session that saw the major averages swing back and forth between gains and losses. At one point, the Dow was up more than 500 points, but then fell to a session low of about 350 points.
“We’re in a market where you just can’t sustain any rally,” Bespoke Investment Group’s Paul Hickey told CNBC’s “TechCheck” on Tuesday. “It’s not surprising given the general trends we’ve seen in the last couple of days and I think we’re going to see more of this in the future.”
Battered tech stocks led Tuesday’s gains. Microsoft and Apple gained more than 1%, and Intel and Salesforce added more than 2%. The sector has suffered some of its biggest losses in recent weeks as investors abandoned growth areas and headed for safe havens such as consumer staples and utilities amid fears of a recession.
Meanwhile, IBM fell almost 4%. Home Depot, 3M and JPMorgan Chase each fell about 2%, dragging the 30-stock Dow Jones into the red.
“So far this weakness has been driven by growth, technology and cyclicals and while we expect further weakness and indeed underperformance here, we are also now seeing worrying signs that the value space may be close to establishing a major top in absolute terms, while some key defensive sectors are also threatening tops,” Credit Suisse’s David Sneddon wrote.
Amid the sell-off, investors continued to look for signs of a bottom.
“We’ve checked a lot of the boxes that you’d like to check on the way to a correction,” said Art Hogan, chief market strategist at National Securities. “Once you get to the household names, the leaders, the generals, you tend to be in the later stages of that corrective process.”
Some, including hedge fund manager David Tepper, think the sell-off is coming to an end. Tepper told CNBC’s Jim Cramer on Tuesday that he expects the Nasdaq to hold around the 12,000 level.
Treasury yields retreated from multi-year highs and the benchmark 10-year Treasury bond yield traded below 3% after hitting its highest level since late 2018 on Monday.
Much of the recent market moves have been driven by the Federal Reserve and how aggressively it will act to curb rising inflation. Additionally, investors continued to monitor the ongoing conflict in Ukraine and lockdowns in China.
“Without something that gives people a sense that one of those pressures is going to ease, I think we have a market that feels largely directionless,” said Tim Lesko of Mariner Wealth Advisors.
Tuesday’s moves came after the S&P 500 fell below the 4,000 level to as low as 3,975.48 on Monday. It marked the index’s weakest point since March 2021. The broad market index fell about 17% from its 52-week high as Wall Street struggled to recover from last week’s losses.