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The US Stock indices headed to the south on Tuesday on declining retail sales data for the month of July 2021.
On Tuesday, August 17, the Dow Jones came crashing down by 0.7% or 280 points amid retail sales for the month of July 2021. This was the end of the five-day-long party happening at Wall Street.
On Tuesday, Dow Jones (INDEXDJX: .DJI) closed at 35,343 levels. Besides, other indexes also showed a similar decline. The S&P 500 (INDEXSP: .INX) tanked 0.7% giving a close at 4.448 levels. Similarly, the tech-heavy Nasdaq Composite was down by 0.9% giving a close at 14,656 levels.
However, this correction comes after both – Dow Jones and S&P 500 – touched record highs in the previous session. For the last month of July 2021, retail sales tanked 1.1% which was a steeper drop against the expected 0.3%. Besides, it also suggested a trend reversal from June’s 0.7% increase in retail sales. Speaking to CNBC, BMO Wealth Management’s Yung-Yu Ma said:
“When we’re looking at the expectations for consumer strength going forward, some of the edge is being taken off by the rise in the delta variant. These challenges aren’t going to go away quickly.”
A Slowdown in Global Growth
Concerns regarding the slowdown in global growth are rising again. Earlier on Monday, China reported some disappointing economic data. The impact is more among the tech and semiconductor players.
Chip-related stocks were down for the second consecutive day on Tuesday. Shares of Nvidia (NASDAQ: NVDA) were down by 2.47%. Similarly, the iShares Semiconductor ETF was down by 1.9%. Shares depending on china’s growth story also faced the plunge on Tuesday.
World’s largest automaker Tesla Inc (NASDAQ: TSL) was down 3%. At the same time, shares of The Boeing Company (NYSE: BA) were down by 3%. At the same time, shares of the Big Tech companies remained under pressure.
On the flip side, it has turned out to be a merrier time for the healthcare companies. The S&P 500 Health Care Sector touched a record high. Top players like UnitedHealth Group (NYSE: UNH), Merck & Co Inc (NYSE: MRK) and Johnson & Johnson (NYSE: JNJ) all moved higher on Tuesday.
Markets have rallied strongly over the last year after the early pandemic crash in March 2020. The S&P 500 has recorded its fastest every 100% gains since the World War 2. On a year-to-date basis, the S&P 500 is up 20% with a staggering performance. Similarly, the Dow Jones is up 16% this year while the Nasdaq Composite is up 15%.