Stock Market Today: Stocks Close Lower Ahead of Powell Testimony

Energy stocks were some of Tuesday's biggest decliners, while Alibaba slid on a C-suite shake-up.

stock market chart
(Image credit: Getty Images)

Stocks closed lower to start the holiday-shortened week as investors took some profits off the table following lengthy weekly win streaks for all three benchmarks. Anticipation surrounding this week's congressional testimony from Federal Reserve Chair Jerome Powell also pressured the broader market.  

"Fed Chairman Powell testifies before Congress on Tuesday and Wednesday," writes Argus Research in a note to clients. "He will be detailing the Fed’s aggressive monetary policy and its attempt to control inflation."

Ahead of this highly anticipated event, today's housing data underscored a resilient U.S. economy. Specifically, housing starts surged 21.7% month-over month in May, handily beating economists' expectations for a slight decline. Building permits, which are an indicator for future construction, were up 5.2%. 

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"The strong recovery in both permits as well as starts is further confirmation that the housing market has continued to improve," says Eugenio Alemán, chief economist at Raymond James. "The question is whether this strength can be sustained with higher mortgage interest rates as the Federal Reserve is expected to increase rates at least one more time this year."

Alibaba stock sinks on CEO news

In single-stock news, Alibaba Holdings (BABA) plunged 4.5% after Daniel Zhang said he will step down as both chairman and CEO of the Chinese e-commerce company. Zhang will transition into the chairman and CEO roles at Alibaba Cloud Intelligence Group, the first of BABA's five business segments slated to go public following the company's major restructuring announced earlier this year. Several other Chinese stocks closed lower today, too, including (JD, -6.7%) and NetEase (NTES, -3.3%). 

Energy stocks were another area of weakness Tuesday, with APA (APA, -2.6%) and Devon Energy (DVN, -3.1%) among the day's biggest decliners. The selloff occurred as U.S. crude futures plunged 1.8% to $70.50 per barrel after China cut its key lending rates, sparking concern over slowing growth in the world's second-largest economy.

As for the major indexes, the Dow Jones Industrial Average slipped 0.7% to 34,053, the S&P 500 shed 0.5% to 4,388, and the Nasdaq Composite gave back 0.2% to 13,667.

Where to invest right now

Today's modest pullback could be considered "healthy" for a market whose recent run higher put it in overbought territory for the first time since August 2022, says Jay Woods, chief global strategist at Freedom Capital Markets.

Looking out to the rest of the year, market participants should brace for more "price choppiness and elevated volatility" as uncertainties surrounding "inflation, the Federal Reserve and interest rates, earnings and economic growth" continue to swirl, says Brian Belski, chief investment strategist at BMO Capital Markets.

Tactical investors trying to figure out how to survive the stock market amid this laundry list of concerns will want to check out Kiplinger's roadmap for where to invest in the second half of 2023. Whether it be sturdy blue chip stocks or the best dividend stocks, many of the experts we talked to believe investors have plenty of opportunities for decent returns going forward.

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Karee Venema
Senior Investing Editor,

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.