US equities tumbled in the final hours of Tuesday trading as hopes for a coronavirus vaccine hit new obstacles.
Investors were treated to a bleak about-face from a positive report on Monday relating to Moderna's coronavirus vaccine candidate. STAT News said Tuesday afternoon that the biotech company's release lacked key data and left medical experts wanting. Moderna shares tumbled as much as 12% on the news after climbing 20% the prior day.
Trader also digested a glut of retail earnings. Walmart shares closed 2% lower despite an initial post-earnings pop. The company reported online sales surging 74% in its first quarter while physical sales jumped 10%. Home Depot slid 3% after the company missed quarterly profit expectations.
Here's where US indexes stood at the 4 p.m. ET market close on Tuesday:
- S&P 500: 2,922.94, down 1.1%
- Dow Jones industrial average: 24,206.86, down 1.6% (391 points)
- Nasdaq composite: 9,185.10, down 0.5%
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Meanwhile, oil continued to rally after a mid-day hiccup as contracts for June delivery approached expiration. West Texas Intermediate crude jumped as much as 5.1%, to $33.44 per barrel, before settling roughly 2% higher. Brent crude, the international benchmark, slid 0.4%, to $34.67 per barrel.
Still, the losses paled in comparison to the commodity's previous expiration-date moves. Contracts for May delivery famously plummeted below $0 per barrel on April 20 before expiring in the following session. The commodity market has since rebounded as producers have slashed pumping activity and demand has crept back in recovering regions.
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Federal Reserve Chair Jerome Powell testified in front of the Senate on Tuesday, reiterating his plans to use the "full range of tools" to keep the economy from collapse. He added that the central bank's $600 billion Main Street Lending Program and remaining initiatives will begin operations by June.
Despite the historic Fed and government relief spending, banks are preparing for a prolonged downturn. Bank of America CEO Brian Moynihan told Bloomberg TV he sees the economy taking until the end of 2021 to fully recover, but noted credit fallout hasn't been as bad as anticipated.
"We expect to see charge-offs coming later on, as this thing goes on, but the reality is right now you're not seeing the type of credit damage that you'd expect to see with this amount of downdraft in activity," he said.
Now read more markets coverage from Markets Insider and Business Insider:
Moderna will spike another 25% from current levels after encouraging progress on coronavirus vaccine, Goldman says
Fed's Powell says an economic recovery could take until the end of 2021 — but doesn't see a full-blown depression taking hold
A BlackRock money manager overseeing the top healthcare fund of the past 20 years pinpoints 3 growth areas she's betting on — and one she's avoiding amid the coronavirus recovery
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