Wall Street closed mixed on Tuesday, pulled up by healthcare, energy and consumer stocks. Optimism over a potential end to the U.S. government shutdown boosted most sectors, while concerns about steep valuations in mega-cap growth stocks dragged down the tech sector. Two of the three benchmark indexes finished in the green, while one ended in red.
The Dow Jones Industrial Average (DJI) rose 1.2%, or 559.33 points, to close at 47,927.96. Twenty-six components of the 30-stock index ended in positive territory, while four ended in the negative.
The tech-heavy Nasdaq Composite slid 58.87 points, or 0.3%, to close at 23,468.3.
The S&P 500 gained 14.18 points, or 0.2%, to close at 6,846.61. Ten of the 11 broad sectors of the benchmark index closed in the green. The Health Care Select Sector SPDR (XLV), the Consumer Staples Select Sector SPDR (XLP) and the Energy Select Sector SPDR (XLE) advanced 2.3%, 1.3% and 1.3% respectively, while the Technology Select Sector SPDR (XLK) declined 0.9%.
The fear gauge CBOE Volatility Index (VIX) decreased 1.8% to 17.28. A total of 15.3 billion shares were traded on Tuesday, lower than the last 20-session average of 20.8 billion. Advancers outnumbered decliners by a 2.2-to-1 ratio on the S&P 500.
On Tuesday, investors weighed optimism over a potential resolution to the prolonged U.S. government shutdown against renewed concerns about overvalued technology stocks. The U.S. Senate passed the funding bill to end the longest-running government shutdown, which entered its 42nd day on Tuesday, as at least eight Democrats backed the agreement proposed by President Donald Trump and the Republicans. The bill will now proceed to the House of Representatives for approval before being sent to President Trump for his signature.
Hopes grew that congressional leaders were nearing a compromise to reopen the government after weeks of political deadlock that had delayed key economic data and dampened business confidence. The prospect of a breakthrough boosted sectors more sensitive to economic growth, including healthcare, energy, industrials and financials. Oil prices also strengthened, helping energy stocks post solid gains.
However, technology shares came under renewed scrutiny after recent rallies pushed valuations to stretched levels. Market participants also remained attentive to upcoming inflation data, which could influence the Fed’s interest rate trajectory. The Fed is expected to maintain its cautious stance. But any signs of persistent price pressures could revive rate-hike concerns.
