U.S. stocks wavered Tuesday, putting a pause on a recent rally that has sent major benchmarks to fresh records.
The S&P 500 swung between small gains and losses and was recently down about 0.2%. The Dow Jones Industrial Average shed roughly 76 points, or 0.3%. The Nasdaq Composite lost about 0.4%. All three indexes closed at all-time highs Monday.
The Russell 2000 of small companies logged a steeper decline, losing 2.3% in afternoon trading.
Stocks have been powering higher in the final days of the year, and the latest leg of the rally has been driven in part by U.S. lawmakers’ efforts to pass a second stimulus package to help the economy. The House of Representatives on Monday approved a bill proposing to increase the size of stimulus checks to $2,000 from $600. The measure now heads to the Senate where its fate is uncertain. The coronavirus continues to spread through the U.S. and many Americans remain in need of economic relief.
“Some people are getting carried away by the race for records. The market momentum is pushing and exceeding these record highs,” said
Carsten Brzeski,
global head of macro research at
One bright spot in the economy continues to be housing. Fresh data released Tuesday showed that home-price growth accelerated in October, as strong demand pushed home sales to a 14-year high.
Trading volumes are also typically thinner in the final days of the year with many people on vacation, which can potentially amplify market moves.
The House voted on Monday to increase federal direct payments to $2,000, paving the way for the Senate to consider the proposed bill.
Photo:
leah millis/Reuters
Overseas, the pan-continental Stoxx Europe 600 added 0.8%. In the U.K., where markets reopened Tuesday, the main FTSE 100 stocks benchmark rose about 1.6% as investors cheered the post-Brexit deal struck on Christmas Eve. British and European Union officials reached an agreement that includes a free-trade accord, bringing to an end over four years of uncertainty.
“The Brexit deal will help risk sentiment. As investors come back to the office for the first time since Christmas, people are looking into the details of the deal,” said
James Athey,
investment manager at Aberdeen Standard Investments.
In Asia, most major benchmarks climbed. Japan’s Nikkei 225 index rose 2.7%, ending the day at a 30-year high. Hong Kong’s Hang Seng Index added 1%, while the Shanghai Composite Index edged down 0.5%.
“The momentum in Asian stocks shows that this whole vaccine-motivated rally is getting global,” Mr. Blokland said. “For 2021, we are quite bullish, we do think that the economic recovery will recommence from [the first quarter] and the stimulus boost out of the U.S. will help.”
—Gunjan Banerji contributed to this article.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
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