Stocks were little changed on Tuesday as traders grappled with civil unrest around the country along with the reopening of the economy from the coronavirus pandemic.
The S&P 500 traded just below the flatline, erasing earlier gains, while a drop in tech shares pushed the Nasdaq Composite down by 0.8%. The Dow Jones Industrial Average was the best performer out of the major indexes, rising 87 points, or 0.3%.
Shares of Facebook and Netflix slid 2.2% and 1.4%, respectively, while Apple and Amazon each fell more than 0.8%. Google-parent Alphabet dropped 0.7%.
Stocks tied to the reopening of states outperformed once again. JPMorgan Chase, Citigroup, Wells Fargo and Bank of America all rose at least 0.8%. Gap climbed 2.1%. Southwest gained 2.4%.
“This is a healthy reversion as you’re seeing some of the laggards come back in line,” said Jeff Kilburg, CEO of KKM Financial. “If anything, this is going to help sustain a more bullish stance in the marketplace.”
Other markets pointed to optimism about the country reopening from the widespread mandated shutdowns due to the coronavirus. Oil added 1.9%. Treasury yields were higher.
Stocks were broadly higher earlier in the session after Reuters reported, citing sources, state-owned Chinese companies bought at least three cargoes of U.S. soybeans.
Tuesday’s moves came after President Donald Trump said Monday night he will deploy the military if states and cities failed to quell the demonstrations.
“I am mobilizing all federal and local resources, civilian and military, to protect the rights of law-abiding Americans,” Trump said. “If a city or state refuses to take the actions necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them.”
The stock market has largely ignored the unrest, but that could change if investors believe the protests would continue through the summer, disrupting states plans to reopen and hurting consumer confidence.
“Good news on vaccines helped stocks in May, but US-China relations & civil unrest could steal the spotlight in June,” Lori Calvasina, RBC’s chief U.S. equity strategist, said in a note. “The S&P 500 remains highly news flow driven.”
New York City has imposed a curfew until June 7 to curb protests. Similar curfews were instituted in cities across the country in an effort to dissolve mass gatherings.
The market rose slightly on Monday, the first day of June, following back-to-back monthly gains. The Dow rose about 90 points on Monday after a 4.2% gain in May and a 11% rally in April. Meanwhile, the S&P 500 climbed about 0.3% after gaining 4.5% in May and 12.6% the month before.
Investors continued to focus on the progress of economic reopenings, bidding up shares of airlines, retailers and cruise line operators. However, many on Wall Street grew worried that rising risks of the racial strife and U.S.-China tensions could reverse the market’s massive comeback.
“The disconnect between stocks and the economy generated widespread concern among some investors,” Jeff Buchbinder, equity strategist for LPL Financial, said in a note. “At the same time, reopening optimism and massive stimulus overshadowed some concerns about a second wave of COVID-19 infections and increasing US-China tensions.”
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