Stocks traded moderately lower Tuesday morning ahead of quarterly results from some of the most prominent names in the technology sector, with a Chinese regulatory crackdown threatening the investing mood on Wall Street.
The developments in Asia come as investors are also waiting for economic reports this week, including second quarter GDP, and a policy update from the Federal Reserve on Wednesday.
How are stock benchmarks trading?
The Dow Jones Industrial Average
dropped 214.97 points, or 0.6%, to 34,929.34.
The S&P 500
was down 20.88 points, or 0.5%, at 4,401.42.
The Nasdaq Composite
declined 42.55 points, or 0.3%, to 14,798.17.
On Monday, major benchmarks closed at record highs for a second straight session. The Dow and the S&P 500 each rose 0.2%, and the Nasdaq Composite inched higher to also set a fresh record.
What’s driving the market?
A multiday win streak for the S&P 500 index and the Dow were in jeopardy Tuesday as investors worried about a selloff in Hong Kong’s Hang Seng Index, which has put pressure on risk assets across the globe.
The Hang Seng HK:HSI ended 4.2% lower in Asian overnight trade, marking its second consecutive drop of more than 4%, amid China’s regulatory crackdown on technology stocks.
shares dived after China published rules requiring online food platforms to pay minimum wage, but the selling was broad-based, with technology giants Tencent
each seeing sharp declines.
Some investors fear that the selling in Asia may dim the shine of a strong U.S. corporate earnings reporting season thus far.
“This crackdown on private businesses from China is significantly denting market sentiment despite a better-than-expected earnings season so far,” said Pierre Veyret, technical analyst at ActivTrades.
Meanwhile, the Federal Reserve kicks off its two-day policy meeting.
In U.S. economic data, orders for durable goods rose 0.8% in June, well below the 2% rise expected by economists. May orders, however, were revised to show a 3.2% rise versus an initial estimate of 2.3%.
The S&P CoreLogic Case-Shiller Home Price Index showed a 16.6% year-over-year rise in May, up from the previous record of 14.8% set last month. The separate 20-city index, which gauges home prices across a group of major cities across the country, increased over the past year by 17% in May, up from 15% in the prior month.
The Conference Board’s consumer confidence index for July is due at 10 a.m. Eastern.
Which companies are in focus?
Tesla Inc. TSLA shares fell 0.4% after the electric vehicle maker late Monday reported a surprisingly strong profit.
3M Co. MMM said Tuesday it had net income of $1.524 billion, or $2.59 a share, in the second quarter, up from $1.306 billion, or $2.25 a share, in the year-earlier period. Shares fell 1.7%.
Shares of General Electric Co.
rose 3%, after the industrial conglomerate reported second-quarter profit and revenue that beat expectations, and surprisingly generated positive free cash flow.
posted better-than-expected adjusted second-quarter profit Tuesday and offered guidance that was above consensus. Shares fell 3.5%.
Shares of United Parcel Service Inc. UPS fell after the package delivery giant reported second-quarter profit and revenue that beat expectations, even as the U.S. domestic business came up short of revenue forecasts.
What are other markets doing?
The yield on the 10-year Treasury note
fell 3.9 basis points to 1.237%. Yields and debt prices move in opposite directions.
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was down 0.2%.