Stocks closed lower Tuesday in Wall Street’s first trading after a five-week rally carried it to its highest level since the spring of last year. The S&P 500 fell 20.88 points, or 0.5%, to 4,388.71. The Dow Jones Industrial Average fell 245.25 points, or 0.7%, to 34,053.87. The Nasdaq composite fell 22.28 points, or 0.2% to 13,667.29. The US stock market took a step back after rising on hopes the economy can avoid a recession and inflation is easing enough for the Federal Reserve to stop raising interest rates soon, the AP reports. Critics say the Fed may have to keep rates higher for longer, which would pressure the economy.
Worries about the global economy's strength dragged down prices for crude oil and stocks of companies that pull it from the ground. Energy stocks fell 2.3% for the largest loss among the 11 sectors that make up the S&P 500. On the winning side was Dice Therapeutics, which soared 37.2% after Eli Lilly said it would buy the biopharmaceutical company for $2.4 billion in cash. Homebuilders were among the biggest gainers in the S&P 500. A report Tuesday morning showed that US homebuilders broke ground on many more sites last month than economists expected. The number of building permits, an indication of future activity, also accelerated faster than expected.
In China, meanwhile, the world’s second-largest economy is stumbling in its recovery following the relaxation of anti-COVID restrictions. Stocks in Hong Kong tumbled 1.5% Tuesday after China’s central bank cut interest rates by less than some investors had hoped. One of China’s biggest corporations, Alibaba Group, also fell after it shook up its top management and announced a new chief executive officer. Its stock trading in the US dropped 4.5%. Tuesday marked the first trading for Wall Street following a meeting between Chinese leader Xi Jinping and US Secretary of State Antony Blinken. It yielded no signs of progress from either side on Taiwan, human rights, technology, and other issues of contention.
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