Stocks on Wall Street couldn’t manage to sustain a morning rally Tuesday, closing nearly flat following Monday’s steep sell-off.
Default fears over property developer China Evergrande and uncertainty ahead of the Federal Reserve’s comments on its bond purchase tapering program coming on Wednesday capped the gains.
Trader Jeff Tomasulo of Vespula Capital says the markets could head further south.
“Can it continue? Absolutely. I think we could get a much deeper sell off, but the key is to see how the market reacts after the Fed tomorrow.”
Tomasulo noted that the S&P failed to climb back above a key technical level that had served as a floor of sorts this year. The S&P and Dow finished roughly flat while the Nasdaq inched a fifth of a percent higher.
Uber shot up nearly 12%. The ride hailing company said it could post its first adjusted profit for the current quarter, citing a recovery in ride bookings and a surge in online food orders.
Shares of Johnson & Johnson rose a half percent. The drug maker said Tuesday a booster shot given two months after the first significantly increased protection against the coronavirus.
And U.S. Bancorp shares gained nearly 3%. The parent of U.S. Bank is buying MUFG Union Bank for $8 billion.