- Falling bond yields drag financials lower on Tuesday.
- Risk-aversion allows defensive stocks to find demand.
After closing the previous day decisively higher, major equity indexes in the U.S. failed to build on the bullish momentum as they started the day lower with markets continuing to asses the possibility of the U.S. and China actually reaching a trade agreement at the end of the 90-day ceasefire period. As of writing, the Dow Jones Industrial Average was losing 0.55%, the S&P 500 was down 0.3% and the Nasdaq Composite Index was falling 0.53%.
The sharp fall witnessed in the U.S. Treasury bond yields weighs on the trade-sensitive S&P 500 Financials Index on Tuesday, which is losing more than 1% in the early trade. Meanwhile, the S&P 500 Industrials Index and the S&P 500 Technology indexes are also down 1.2% and 1%, respectively, ramping up the bearish pressure surrounding the equity markets.
The risk-off mood seems to be boosting the defensive sectors with the S&P 500 Utilities and the S&P 500 Real Estate indexes rising 0.55% and 0.25% as of writing.
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