On Tuesday, US stocks experienced their worst day in 2017 with stocks of banks leading the way down.
At 11:50 a.m. ET, Nasdaq was down around 1.8-percent or 107 points, S&P (Standard & Poor) 500 was down 1.2-percent or 29 points, and the Down tumbled 1.1-percent or 237 points. In the meantime, Russell 2000 came out as one of the biggest losers, plunging 2.7-percent or 37 points. The US Treasury yields also faced a down following trend, with the 10-year yield plummeting to 2.41-percent after trading near highs like 2.6-percent a few weeks back.
Bank stocks were the biggest losers with the sector-tracking XLF ETF declining by almost 2.4-percent. Bank stocks are presently down by approximately 5-percent in the last week.
There are two concerns here. The first is that banking sector seems to be leveling yield curve. Secondly, there are worries over the difficulty being faced by President Donald Trump in getting a complete tax reformation package done, provided the problems faced by the administration with it’s first plan to cancel and substitute Obamacare.
In the banking field, the individual losers were Morgan Stanley (MS) losing 3-percent, Bank of America (BAC) losing more than 4-percent, and Goldman Sachs (GS) losing 2.4-percent.
Apart from the news-oriented reasons, which were impelling Tuesday’s Wall Street sentiment, several analysts pointed out some technical reasons as the cause for the decline.
Considering the market on a technical basis, Bespoke Investment Group’s analysts noted that for the first time after early February the drop of S&P 500 seems set to watch the index near non-overbought levels.
In simple words, the market’s technical reading shows that the stock market is considerably beyond the latest positive trend.