Stocks resumed their selloff for most of day, but the Dow offered a glimmer of hope for turnaround Tuesday when it briefly turned green in the afternoon.
But even though stocks ended off their lows, the major indexes all ended in the red.
“Recent price action suggests the long overdue equity market correction has finally begun. In our view, this is a healthy long-term development,” said Steven Ricchiuto, US chief economist at Mizuho Securities.
For value hunters, the recent selloffs might present an opportunity “to begin nibbling at some of the more beaten down areas of the market,” he added.
What’s driving markets
Investors have a lot on their plate right now.
The Federal Reserve’s meeting is kicking off ahead of Wednesday’s policy decision. Although Fed Chairman Jerome Powell hasn’t made a secret of the central bank’s plans to roll back stimulus and raise interest rates this year, it’s stressing investors out.
The Fed’s expected actions come in response to rampant pandemic-era inflation. Economists and investors worry when will prices have soared so much that Americans stop spending — a terrible sign for the recovery.
Consumer confidence fell slightly in January, data from The Conference Board showed Tuesday, but it was still better than economists had expected. American’s view of the present situation improved even though short-term growth expectations declined.
“Concerns about inflation declined for the second straight month, but remain elevated after hitting a 13-year high in November 2021,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Concerns about the pandemic increased slightly, amid the ongoing Omicron surge.”
With earnings season in full swing, investors want to hear how much of the production price increases companies can pass onto their consumers.