Wall Street Dips as Apple, Tesla Lead Fresh Round of Sector Rotation Selling

The major U.S. stock indexes settled lower on Tuesday, pressured by popular technology issues, Apple and Tesla. Losses were softened, however, by a climb in materials stocks as investors waited for the U.S. Congress to approve another stimulus package. Losses may have also been limited by Treasury yields, which stabilized after hitting a one-year high last Thursday.

In the cash market on Tuesday, the benchmark S&P 500 Index settled at 3870.29, down 31.53 or -0.81%. The blue chip Dow Jones Industrial Average finished at 31391.52, down 143.99, or -0.46% and the technology-driven NASDAQ Composite closed at 13358.79, down 230.04 or -1.69%.

Still Up for the Week Led by Vaccination Optimism, Stimulus Progress

The S&P 500 on Monday logged its best day since June as markets cheered approval of a third COVID-19 vaccine in the United States and the U.S. House of Representatives’ green light for a $1.9 trillion coronavirus relief package.

The U.S. Senate will start debating President Joe Biden’s relief bill this week when Democrats aim to pass the legislation through a maneuver known as “reconciliation,” which would allow the bill to pass with a simple majority.

Sector Rotation Resumes

Following strong gains in the prior session, technology shares dipped in the resumption of a rotation by investors out of stocks that outperformed due to the coronavirus pandemic and into others viewed as likely to do well as the economy recovers, Reuters reported.

The S&P 500 technology sector dropped, extending a pullback from late last month after a selloff in the U.S. bond market sparked fears over highly valued stocks. These losses were offset a little as S&P 500 Materials and Consumer Staples Sector Indexes rose.