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%.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"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.com (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.
Related Content
-
Credit Cards That Actually Reward Your LoyaltyIf you have bank or investment accounts with your credit card issuer, you may qualify for extra cash back, waived fees and other benefits.
-
The 10 Most Valuable Vacation Destinations for Retirees in 2026Whether traveling within the U.S. or internationally, retirees can find a perfect blend of relaxation and excitement in these destinations, all while staying within budget.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
Dow Hits New Intraday High: Stock Market TodayValue-hunters with big stakes in a particular component kept one of the main U.S. equity indexes in positive territory.
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
