S&P 500 Drops after an $8.6 Trillion Surge from Lows – US Market Wrap

Wall Street’s rally paused on Tuesday, with stocks falling as traders sought new catalysts following a six-day run that saw the S&P 500 rise nearly 20% from its April lows.

The US equity benchmark weakened after a $8.6 trillion surge to “overbought” levels. A drop in its most influential group, big tech, weighed on trading, with Alphabet falling 1.5% during the company’s developer conference. Tesla was the only megacap to rise after Elon Musk stated that he intends to lead the electric-vehicle behemoth for the next five years.

Long-term Treasury yields rose as fractious US budget negotiations centered on the rise in deficit spending. According to a senior administration official, President Donald Trump is becoming increasingly frustrated with demands to significantly raise the cap on the state and local tax deduction, indicating a deadlock as Republicans seek to quickly pass a massive tax-cut bill.

Despite the stock market’s pullback, May is shaping up to be a surprisingly strong month for the S&P 500. Markets have calmed after months of turmoil, as hopes grow that Trump’s tariff blitz will be less severe than anticipated. Nonetheless, investors are scouring charts for clues on whether the rally can continue, as the gauge approaches levels that some technicians regard as a sign of overheating.

The S&P 500 index fell 0.4%. The Nasdaq 100 declined 0.4%. The Dow Jones Industrial Average declined 0.3%.
The yield on 10-year Treasuries increased four basis points to 4.48%. The dollar fell 0.2%.