Stocks drifted lower Tuesday following a volatile session sparked by the sudden unwinding of a hedge fund run by a marquee investor.
The Dow dropped by more than 100 points, ending a three-day winning streak. Both the S&P 500 and Nasdaq also dipped. Treasury yields gained, and the benchmark 10-year Treasury yield rose to about 1.75%.
A day earlier, a choppy session ultimately resulted in the Dow notching a new record close, though tech stocks and the broader market slipped. Several big name stocks took a hit after Bill Hwang, a fund manager and the ex-head of Tiger Management's family office, was confronted by a margin call that forced the liquidation of billions in stock holdings. Shares of major media companies including Viacom (VIA) and Discovery (DISC), which were both hit on Monday in the wake of the moves, recovered some losses in early trading.
Hwang's firm, Archegos Capital Management, was forced by its banks to sell more than $20 billion worth of shares after some positions moved against him. In a related move, Swiss banking giant Credit Suisse (CS) warned that the volatility stemming from the firm's liquidation would force the bank to take a "highly significant" hit to its first quarter results.
In spite of contagion fears stemming from Archegos' margin call, however, the Dow crept to a fresh closing high. The week will be mostly quiet until Friday, when the March jobs report is released. The data are expected to show the economy created a whopping 650,000 jobs — the most since October 2019 and the best since the onset of the COVID-19 pandemic.
The past couple weeks have been marked by choppy equity trading, especially heading into some of the final sessions of the first quarter. But overall, the cyclical energy, financials and industrials sectors – or the biggest under-performers of 2020 – have outperformed strongly for the year-to-date, while last year's leading technology companies have lagged. Signs of improving economic growth have trickled in, with last Thursday's bigger-than-expected drop in new unemployment claims to a pandemic-era low among the latest positive reports.
A prevailing concern for many investors, however, has in fact been centered on the pace of economic expansion, and whether the stimulus-aided post-pandemic recovery might barrel forward even more vigorously than expected and stir up rapid inflation. In the wake of passing a $2 trillion stimulus package, the Biden administration is gearing up for even more spending — and the likelihood of higher taxes.
"You can be sure the spending with have a multiplier less than zero and tax increases are always an economic drag with the extent the only difference," noted Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group.
4:05 p.m. ET: Dow drops 104 points, or 0.3%, to retreat from a record high and end a three-day winning streak
Here were the main moves in markets as of 4:05 p.m. ET:
S&P 500 (^GSPC): -12.52 (-0.32%) to 3,958.57
Dow (^DJI): -104.41 (-0.31%) to 33,066.96
Nasdaq (^IXIC): -14.25 (-0.11%) to 13,045.39
Crude (CL=F): -$1.21 (-1.97%) to $60.35 a barrel
Gold (GC=F): -$30.80 (-1.80%) to $1,683.80 per ounce
10-year Treasury (^TNX): +0.5 bps to yield 1.7260%
1:13 p.m. ET: Latest Ark Investment Management ETF posts strong debut as firm shakes off recent rout in ARKK fund
Ark Investment Management launched its first new exchange traded fund in two years, with shares of the firm's ARK Space Exploration ETF (ARKX) trading hands publicly for the first time on Tuesday.
More than $196 million in shares were exchanged as of noon in New York, according to Bloomberg data.
The strong debut came even as Ark's flagship fund, the ARK Innovation Fund, has endured a recent rout amid growth and tech share selling in the broader market. That ETF – which counts stocks such as Tesla and Square among its largest holdings – has dropped 8.8% for the year to date, after rallying by 150% in 2020.
12:53 p.m. ET: Stocks hold lower, Dow drops 140 points, or 0.4%
Here's where markets were trading Tuesday afternoon:
S&P 500 (^GSPC): -18.6 points (-0.47%) to 3,952.49
Dow (^DJI): -139.56 points (-0.42%) to 33,031.81
Nasdaq (^IXIC): -37.5 points (-0.28%) to 13,022.57
Crude (CL=F): -$1.09 (-1.77%) to $60.47 a barrel
Gold (GC=F): -$28.80 (-1.68%) to $1,685.80 per ounce
10-year Treasury (^TNX): +0.9 bps to yield 1.73%
10:03 a.m. ET: Consumer confidence surged to a one-year high in March as stimulus checks, vaccinations boost optimism
Consumer confidence rocketed higher in March, pushing to the highest level since the start of the pandemic as government stimulus checks and faster-than-anticipated vaccinations in the U.S. gave consumers reason to cheer.
The Conference Board's closely watched consumer confidence index increased to 109.7 in March from 90.4 in February. The latest print sharply exceeded consensus economist expectations, which had forecast a print of 96.9. The index's labor market differential, or the difference between individuals saying jobs are "plentiful" and those are "hard to get," increased to 7.8 in March for the best print since March 2020 as well.
Still, even with the marked increase, consumer confidence remains below 2019 levels, when the index averaged around about 128 per month.
9:57 a.m. ET: GameStop shares jump, bucking the trend of the broader market after hiring Amazon executive as chief growth officer
Shares of GameStop (GME) increased more than 3% intraday on Tuesday to top $187.50 per share after the company announced it had named Amazon executive Elliott Wilke as its chief growth officer, adding to a lineup of new executives as the video game retailer builds out its e-commerce business.
Wilke is set to oversee growth strategy and marketing, "with a focus on increasing customer loyalty and growing the reach of Power Up Rewards and Game Informer," according to the company. Previously he spent seven years at Amazon in senior roles across the company, including with Amazon Fresh and Prime Pantry.
9:30 a.m. ET: Stocks edge lower
Here's where markets were trading as of 9:30 a.m. ET Tuesday:
S&P 500 (^GSPC): -8.59 points (-0.22%) to 3,962.5
Dow (^DJI): -20.81 points (-0.06%) to 33,150.56
Nasdaq (^IXIC): -65.64 points (-0.5%) to 12,992.27
Crude (CL=F): -$0.97 (-1.58%) to $60.59 a barrel
Gold (GC=F): -$27.00 (-1.57%) to $1,687.60 per ounce
10-year Treasury (^TNX): +2.5 bps to yield 1.746%
9:03 a.m. ET: U.S. home prices grew by the most since in 15 years in January
Home prices in the U.S. surged by the most since early 2006 in January this year, as booming demand for new homes and tight inventories pushed up prices and weighed more heavily on affordability.
The S&P CoreLogic Case-Shiller national home price index jumped by 11.2% in January year-over-year, accelerating from December's 10.4% gain. Consensus economists were looking for a 10.5% rise.
The 20-City Composite index, which tracks home price changes in 20 major U.S. metropolitan areas, jumped by 11.1% over last year, also accelerating from the 10.2% rise in December.
7:00 a.m. ET: Tuesday: Futures point to a mixed open as tech selling pressure lingers
Here's where markets were trading ahead of the opening bell:
S&P 500 futures (ES=F): 3953.25, -5.75 points or 0.15%
Dow futures (YM=F): 33,073.00, +41.00 points or 0.12%
Nasdaq futures (NQ=F): 12,853.5, -91.00 points or 0.7%
Crude (CL=F): -$60.64 (-0.92%) to $60.64 a barrel
Gold (GC=F): -$20.70 (-1.21%) to $1,693.90 per ounce
10-year Treasury (^TNX): +4.1 bps to yield 1.76
6:00 p.m. ET Monday: Stock futures rise after choppy session
Here's where markets were trading on Monday evening:
S&P 500 futures (ES=F): 3966.75, +7.75
Dow futures (YM=F): 33086, +54
Nasdaq futures (NQ=F): 12977.00, +32.50
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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