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US equities fluctuated on Tuesday, investors continued to back away from growth equities and bolstered bets on a short-term economic recovery.
The encouraging vaccine update from Pfizer and BioNTech, which fueled a massive surge in stocks Monday, continued to drive a shift from expensive tech stocks to stocks more likely to outperform in an economic reopening.
The Nasdaq high-tech composite tumbled, while the Dow Jones industrial average and the small-cap-focused Russell 2000 rose. Popular stay-at-home plays, including Netflix, Zoom and Amazon, continued to decline as investors bet on short-term vaccine distribution.
Here’s where the US indices placed at the close of 4 p.m. ET Tuesday:
Read more: Buy these 21 overlooked stocks expected to turn big as the world’s vaccine hopes have come true, says Jefferies
“With a viable vaccine seemingly on the horizon, it may be time to take a second look at your portfolio,” said Lindsey Bell, chief investment strategist at Ally Invest. “Stocks that could benefit from a return to normal life, or from ‘reopening trading,’ could be worth keeping an eye on for the next few weeks.”
The Dow and S&P 500 jumped to record intraday highs on Monday. The Pfizer update raised investors’ appetite for risk and kicked off the week’s rotation toward cyclical names. The reopening of businesses such as airlines, cruises and hotels was won. Gold fell the most in three months when investors ditched safe-haven assets.
Pfizer and BioNTech announced Monday that their experimental coronavirus vaccine was found to be more than 90% effective in preventing COVID-19 in a late-stage trial. The companies now plan to apply for an emergency use authorization with the US Food and Drug Administration to expedite the launch of their vaccine. The announcement suggests a breakthrough in the race to find a viable vaccine and sparked hope on Wall Street that the pandemic could be contained sooner than expected.
Whether it could come soon enough to avoid additional financial damage is a different story. The United States reached 10 million COVID-19 cases on Monday as infection rates rose across the country. The Federal Reserve said in a report on Monday that an inability to contain the outbreak could sink asset prices in risky markets.
Read more: Goldman Sachs reviewed hundreds of earnings transcripts to arrive at the 4 themes that S&P 500 companies adopted this quarter, and shared the dozens of actions that will benefit from these thematic trends.
Beyond facing pressure from wide market rotation, Amazon sank after the European Union unveiled formal antitrust charges against the e-commerce titan. The EU’s top antitrust official alleged that Amazon illegally abused its dominant position in Germany and France.
Beyond Meat sank after the company reported an unexpected loss in the third quarter and lost revenue estimates. Stocks hit their lowest level since May when Wall Street examined worse-than-expected results.
Alibaba fell as regulatory concerns overshadowed the sell-off for the company’s Singles Day event. The Wall Street Journal reported on Tuesday that Chinese regulators released a new draft of antitrust rules that could drag down online platforms like Alibaba.
Peloton erased initial earnings and traded higher after the company signed a multi-year deal with Beyonce. The artist will produce several unique training programs on the theme of Homecoming, the annual fall celebration for historically African-American college and university students.
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Spot gold rose as much as 1.5% to an intraday high of $ 1,890.53 an ounce. The US dollar fell slightly and Treasury yields rose.
Bitcoin traded just below $ 15,300 after failing to break above $ 16,000 in its prolonged rally. The recent momentum of the cryptocurrency has mostly stalled since it traded above $ 15,000.
Oil prices continued to rise, recovering their support level of $ 40 per barrel. West Texas Intermediate crude was up 2.9% at $ 41.46 a barrel. Brent crude, the international benchmark for oil, rose 3% to $ 43.66 a barrel, at intraday highs.
Now read more market coverage from Markets Insider and Business Insider:
8 World-Class Investors Share How They Have Positioned To Benefit From The Long-awaited COVID-19 Vaccine Advancement, And The Bets They Have Been Placing All Year Long In A Post-pandemic World
Rising coronavirus cases could slow economic growth well into 2021, says Dallas Fed president
Job openings in the US increase slightly in September, but fall short of expectations as labor market recovery slows
