By Christine Idzelis and William Watts
U.S. stocks ended slightly lower Tuesday, but closed out August with monthly gains, while the S&P 500 index has ended the first eight months of the year with its strongest year-to-date gain since 1997.
What did major indexes do?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.09% declined 39.11 points, or 0.1%, at 35,360.73.
The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.75% dipped 6.11 points, or 0.1%, to 4,522.68.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.50% slipped 6.65 points, or less than 0.1%, to 15,259.24.
On Monday, the S&P 500 booked its 53rd record close of 2021 and the Nasdaq Composite also finished at an all-time high. The S&P 500 ended the first eight months of the year with its strongest year-to-date gain since 1997.
For the month, the Dow rose 1.2%, while the S&P 500 climbed 2.9% and the Nasdaq gained 4%. The small-cap Russell 2000 /zigman2/quotes/210598147/delayed RUT -0.37% saw 2.1% gain in August.
What drove the market?
Stocks closed lower Tuesday, as investors looked ahead to U.S. jobs data for August coming Friday, where they might find clues as to when the Federal Reserve may begin tapering its bond purchases which have helped to support markets during the pandemic.
“We’re entering a very weak seasonal period of the year,” said Matt Forester, chief investment officer of Lockwood Advisors at BNY Mellon Pershing, in a phone interview Tuesday. “If we’re going to get some kind of a modest pullback in equities, the time seems to be ripe for that .”
The August jobs report on Friday will give markets their next major chance to estimate when and how the Federal Reserve will begin tapering its $120 billion of monthly bond purchases.
“We are looking for two more months of strong jobs reports — four reports make a trend — for tapering to begin on a November or December timeline,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments, in a note to clients.
“The biggest single risk to this outlook in our view is widespread school closures. If schools don’t open for in-person learning, the constraint on labor supply could contribute to the wage-price spiral investors fear,” she said.
Inflationary pressure and heightened concerns over Covid-19 infection rates appear to be troubling consumers, John Carey, director of equity income at Amundi U.S., said in a phone interview Tuesday.
The Conference Board said its closely followed index of consumer confidence slid to a six-month low at 113.8 this month from a revised 125.1 in July, reflecting concerns about the spread of the delta variant of the coronavirus that causes COVID-19.
Analysts have noted that high-frequency data has indicated that declines in confidence have yet to translate into a sharp slowdown in activity.