US Stocks Slump, Snapping 5-Day Rally Ahead of Federal Reserve Meeting, Big Tech Earnings

NEW YORK (Sputnik) - US stocks slumped on Tuesday, snapping a five-day rally and a record-high run, as caution seeped in ahead of the Federal Reserve’s monthly announcement on interest rates and as players took profits before a slew of second quarter earnings results from Big Tech companies.

The tech-heavy Nasdaq Composite fell 180 points, or 1.2 percent, to close at 14,661, to lead Wall Street’s losses for the day, just before high-flying names such as Microsoft, Google and Apple are to report quarterly earnings. In Monday’s session, Nasdaq posted a record high of 14,864.

The S&P 500 index, which groups the top 500 stocks on the New York Stock Exchange, closed down 20 points, or 0.5 percent, at 4,402. The S&P 500 hit its highest peak to date of 4,415 in the previous session.

The Dow Jones Industrial Average, the broadest US equity barometer on the New York Stock Exchange, lost 86 points, or 0.2 percent, to finish at 35,059. The Dow hit an all-time high of 35,150 on Monday.

“We're continuing to see caution in the markets on Tuesday as investors prepare for an intense 48 hours, with big tech reporting and the Fed meeting,” Craig Erlam, an analyst at the New York-based brokerage firm OANDA, said.

The Federal Reserve will announce on Wednesday its decision on whether it will raise interest rates and on other important monetary matters for July.

Most analysts have said they do not expect the Federal Reserve to initiate any changes, although they expect the central bank to provide more details about when it hopes to begin tapering the monthly $120-billion bond purchase it has been doing since the beginning of the coronavirus pandemic 16 months ago.

Investors will also get a first look on Thursday at the second-quarter US GDP figures, which is expected to show the peak of the first wave of the post-pandemic recovery.