U.S. stocks dropped again on Tuesday, marking a rare two-day slide as the momentum behind Wall Street's record-breaking rally appears to be cooling.
The S&P 500 dipped by 0.4 percent in early trading, positioning the index for its first back-to-back loss in over six weeks. This comes on the heels of a modest slip on Monday, following six consecutive weeks of gains.
As of Tuesday morning, the Dow Jones Industrial Average fell 91 points, or 0.2 percent, pulling further away from the all-time high set last Friday. Meanwhile, the tech-heavy Nasdaq composite saw a 0.5 percent decline, reflecting broader market pressures.
Among individual stocks, Kimberly-Clark, the company behind popular brands like Kleenex and Huggies, tumbled 4.5 percent despite surpassing profit expectations for the quarter. Investors were spooked by weaker-than-expected revenue and a revised revenue growth forecast, which now sits between 3 percent and 4 percent, down from previous expectations of "mid-single-digit" growth.
Verizon Communications also suffered a sharp 6.2 percent drop after reporting disappointing revenue numbers, although the telecom giant did beat profit forecasts. Similarly, Sherwin-Williams fell 3.6 percent after both its profit and revenue missed analysts' expectations, with the company's CEO citing ongoing economic headwinds and weak consumer demand in North America.
On the upside, 3M rallied 4 percent after reporting stronger-than-expected profit and revenue, with the company behind Scotchgard, Post-it notes and Ace bandages also raising its profit outlook for the year.
Meanwhile, bond yields played a significant role in the market's pullback as increasing pressure from rising Treasury yields in the bond market has led to stocks slowing their record-breaking momentum this week.
While the yield on the 10-year Treasury bond edged down slightly to 4.16 percent from 4.20 percent on Monday, it remains higher than Friday's 4.08 percent, applying additional pressure on stocks. Rising yields generally discourage investors from paying premium prices for stocks, especially when valuations already appear stretched.
The climb in Treasury yields reflects a robust U.S. economy, which has continued to defy expectations and stave off recession fears. Strong economic data has led Wall Street to dial back expectations for interest rate cuts by the Federal Reserve, with traders now forecasting a half-point cut through the end of the year—down from more aggressive earlier projections.
Global markets mirrored Wall Street's caution with European indexes trending lower despite a slight boost from German software company SAP. Asian markets were mixed as traders digested the latest economic signals.
This article includes reporting from The Associated Press.
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