After enjoying a five-week rally that propelled Wall Street to its highest level since last year, stocks experienced a pullback in Tuesday’s trading.

The S&P 500 declined by 20.88 points, equivalent to 0.5%, closing at 4,388.71. Similarly, the Dow Jones Industrial Average dropped by 245.25 points, or 0.7%, reaching 34,053.87.

The Nasdaq composite also experienced a loss of 22.28 points, or 0.2%, settling at 13,667.29.

The retreat in the U.S. stock market follows a series of positive strides, fueled by optimism that the economy will avoid a recession and that inflation will ease sufficiently for the Federal Reserve to halt its interest rate hikes in the near future, the Associated Press reports.

Moreover, a surge of interest in artificial intelligence has propelled select tech stocks to significant gains.

However, concerns persist regarding the potential impact of persistent inflation, which may necessitate the Federal Reserve to maintain higher interest rates for an extended period.

This scenario could potentially weigh on the economy. Additionally, as the year-over-year inflation comparisons become more challenging, both the economy and financial markets may face a more arduous path ahead.

Written by staff