• US equity benchmarks bear the burden of risk aversion.
  • US Retail Sales, downbeat earnings and virus woes offer a triple whammy of bears.
  • DXC Technologies, Tencent Music Entertainment slumped 12%, Moderna bucks the bearish impulse.
  • Fed policymakers’ mixed signal highlights FOMC Minutes for fresh direction.

US equity market finally had to invite bears on Tuesday after multiple days of resistance. The virus woes, indecision among the Fed policymakers and disappointing US Retail Sales for July could be spotted on the invitation card for the sellers.


Read: Forex Today: Dollar keeps running on fear

That said, Dow Jones Industrial Average (DJI) and S&:P 500 dropped for the first time in the last six days, down 0.79% and 0.71% respectively to end the North American session around 35,343 and 4448 in that order. Further, Nasdaq also paused a three-day uptrend with the heaviest daily losses since July 27, down 0.93% on a day to 14,656 at the closing bell.

US Retail Sales for July, -1.1% MoM versus -0.3% expected and +0.7% prior, amplified economic concerns due to the Delta covid variant even as Atlanta Fed GDPNow indicator for Q3 rose to 6.2% versus 6.0% for Q2. Fed Chairman Jerome Powell and Minneapolis Presider Neel Kashkari also tried to battle the bearish impulse but failed as markets keep tapering expectations on the table.

Elsewhere, New Zealand’s entry into the Delta covid variant -infected nations’ list and geopolitical fears emanating from Afghanistan are extra catalysts that weighed on the market sentiment.

It’s worth noting that a fall in comparable sales of Home Depot during the fiscal second-quarter dragged HD and weighed on the risk appetite as well. On the same line was Tencent Music Entertainment that slumped over 12% whereas JP Morgan’s downgrade to DXC Technology pleased DXC bears. On the contrary, Moderna cheered the UK’s approval of its Spikevax covid vaccine for 12 to 17-year olds while Wallmart shares couldn’t benefit from upward revision to the same-store sale forecast.

On a broader front, the US 10-year Treasury yields dropped one basis point to 1.26% whereas commodities were down and the US Dollar Index (DXY) marked a two-day uptrend by the end of Tuesday’s trading.

Looking forward, the monetary policy meeting minutes for the latest Federal Open Market Committee (FOMC) will be the key event on Wednesday. Though, risk catalysts keep the driver’s seat.

Read: FOMC Minutes July Preview: More new questions than answers

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