By Eric Wallerstein
Stocks fell on Tuesday, continuing to fall from recent all-time highs.
The S&P 500 lost 0.3%, while the tech-heavy Nasdaq slid 0.4%. The blue-chip Dow industrials dropped 0.1%, or about 31 points.
Micron Technology added 1.4%, after hitting an all-time high a day earlier. The memory-chip maker is on pace for its best month since December 2009, when it rose 40%. Other top performers included data-storage company Seagate Technology, rising 7.4%, and Tesla, which climbed 2.9%.
Investors broadly aren't concerned about a significant pullback, said Thomas Martin, a senior portfolio manager at Globalt Investments. While analysts are often wary when markets are euphoric, he sees strong underpinnings and more room for the rally to run.
"There's plenty of real demand for chips out there, and real earnings growth" for companies like Nvidia, Micron and Broadcom, he said. "If that starts to crack, markets will likely look more vulnerable."
Martin doesn't foresee concerns about the artificial-intelligence boom materializing in first-quarter earnings reports, some of which are due in just a few weeks. He is overweight shares of large and growth-oriented companies, meaning he has more exposure than the broader market.
Fresh economic data signaled the economy remains on solid footing, at least for companies and households with cash to spare. Orders for long-lasting goods jumped in February, showing strong demand for aircrafts and other transportation equipment. Meanwhile, home prices rose 6% in January from a year earlier, the fastest clip since 2022.
"We're in an environment where growth continues to positively surprise," said Bill Merz, head of capital-markets research at U.S. Bank Wealth Management. "The market is telling us loud and clear what is apparent in some of the backward-looking economic data: This is a good environment to lean into risky assets."
A damper on the strong data was consumer confidence. At 104.7 for March, the Conference Board's index fell below analysts' expected 107. The organization's chief economist, Dana Peterson, said that older Americans are feeling more optimistic, while lower-income individuals are growing wary as the job market cools.
Bond prices fell when yields rose after the durable-goods and home-price data. In the afternoon, strong investor demand for a record $67 billion Treasury Department auction of 5-year notes relieved the upward pressure on bond yields.
The 10-year U.S. Treasury note yield finished Tuesday at 4.233% from 4.252% the prior day, halting its recent climb.
Donald Trump is primed for a financial boost now that the parent company of his social-media platform, Truth Social, is trading on the Nasdaq. Lifted by supporters of the former president, shares of the company soared 16% from the SPAC's last closing price. It rose as much as 59% during volatile trading.
Krispy Kreme shares jumped 39% on Tuesday after the company said it has reached a deal to sell its doughnuts at McDonald's restaurants across the U.S. Elsewhere in sugary investments, most-active cocoa futures topped $10,000 a metric ton for the first time, continuing a recent surge.
Overseas, the Stoxx Europe 600 index hit a second consecutive record high. It is up 6.7% this year. Benchmark indexes in Shanghai and Hong Kong also climbed.
Write to Eric Wallerstein at eric.wallerstein@wsj.com
(END) Dow Jones Newswires
March 26, 2024 16:48 ET (20:48 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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