Author: Minnie Arwood

Stocks were mostly lower Tuesday with technology stocks under further pressure, as investors further mulled the market implications of Federal Reserve Jerome Powell’s renomination to lead the central bank.

The S&P 500 ticked down. A day earlier, the blue-chip index had set an all-time intraday high before pulling back to end in the red, with a drop in technology stocks weighing. 

U.S. West Texas intermediate crude oil futures (CL=F) recovered losses and rose after dropping more than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} earlier in the morning. The move came after the White House announced it would be releasing a total of 50 million barrels of oil from the Strategic Petroleum Reserve (SPR), in tandem with similar moves from China, Japan, India and South Korea and the U.K., to try and ease rising energy prices with additional supply. 

Shares of Zoom Video Communication (ZM) slid even after the company posted better-than-expected quarterly revenue growth and full-year guidance, with usage of the video conferencing company’s software slowing amid the reopening. Companies including Nordstrom (JWN), The Gap (GPS) and Autodesk (ADSK) are set to report quarterly results on Tuesday.

Federal Reserve Chair Jerome Powell’s renomination to the top leadership position at the central bank captured market attention this week, with many investors reacting favorably to the likelihood that the Fed’s previously telegraphed monetary policy framework would remain in place with Powell’s reappointment. That includes expectations for current asset-purchase tapering to take place through the middle of next year, and for at least one interest rate hike to take place before the end of 2022.

“Continuity at a time of such extraordinary uncertainty is certainly welcome news. We have extraordinary uncertainty because we’re pivoting from the phase of the cycle where the Fed had been shoring up the recovery from the pandemic-induced recession, and … it did avoid a meltdown in financial markets,” Diane Swonk, Grant Thornton chief economist, told Yahoo Finance Live. “But now we’ve got very easy financial market conditions and we’re dealing with inflation. And having to pivot to dealing with inflation and tamp it down without derailing the recovery — that’s a very hard thing to pull off. We’ve not seen the Fed actually chase inflation down since the early 1980s.”

President Joe Biden also nominated Fed Governor Lael Brainard – previously viewed as a potential candidate for the Fed Chair position to replace Powell — as Vice Chair of the Board of Governors for the Fed. With these two nominations in place, market participants have turned their attention to who might fill he three vacant and soon-to-be vacant seats on the Fed Board, which includes the key Vice Chair for Supervision role. Biden said in a press statement Monday morning he expected to announce those appointments “beginning in early December.”

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“Political decisions like this are competitions between affinity — you like someone in your own party — and convenience — what can you get the Senate to do for you, and will markets receive it well? You have to view the Powell-Brainard picks as part … of a bigger package,” Vincent Reinhart, Dreyfus-Mellon chief economist and macro strategist, told Yahoo Finance Live. “The White House is going to have three new governors to appoint, and presumably that’s going to tilt more progressive. So bottom-line, six months from now, the group of people that Chair Powell has to wrangle to make decisions is going to be more dovish than it is today.”

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9:49 a.m. ET: U.S. services PMI falls to two-month low, while manufacturing PMI rises to two-month high: IHS Markit

Closely watched indices tracking economic activity in both the U.S. services and manufacturing sectors showed a divergence in early November, with the supply constraints and rising prices dampening growth especially in private service industries. 

IHS Markit’s preliminary November U.S. services purchasing managers’ index (PMI) unexpectedly fell to 57.0 from 58.7 in October, marking the lowest level in two months. Consensus economists had been looking for the index to rise to 59.0, according to Bloomberg data. Readings above the neutral level of 50.0 indicate expansion in a sector.

The firm’s manufacturing PMI, however, rose to a two-month high of 59.1 and matched expectations. The manufacturing PMI had been at 58.4 in October. Taken together with the drop in the services PMI, the composite PMI for November fell to 56.5 from 57.6 in October, in a sign of slowing overall growth. 

“The slowdown underscores how the economy is struggling to cope with ongoing supply constraints,” Chris Williamson, chief business economist for IHS Markit, wrote in a press statement. Although supplier delivery delays eased to the lowest for six months, the lengthening of lead times remains far greater than anything seen prior to the pandemic, restricting output relative to demand and once again causing prices to rise sharply.” 

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9:34 a.m. ET: S&P 500, Nasdaq extend declines as tech drop continues

Stocks open mixed on Tuesday, with both the S&P 500 and Nasdaq declining as technology stocks added to Monday’s losses. 

The Dow hovered little changed, with financials and other cyclical stocks rising further following Federal Reserve Chair Jerome Powell’s renomination to keep his role as leader of the central bank. Goldman Sachs, Chevron and JPMorgan Chase outperformed in the 30-stock index, while Microsoft, Salesforce.com and Nike weighed to the downside. 

Treasury yields also gained across the long end of the curve. The benchmark 10-year yield rose more than 2 basis points to drift just below 1.646{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. 

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7:33 a.m. ET Tuesday: Stock futures mostly lower 

Here’s where markets were trading Tuesday morning:

• S&P 500 futures (ES=F): -1 point (-0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,678.75

• Dow futures (YM=F): +21 points (+0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,592.00

• Nasdaq futures (NQ=F): -26.75 points (-0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,355.25

• Crude (CL=F): -$0.42 (-0.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $76.33 a barrel

• Gold (GC=F): -$9.30 (-0.51{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,797.00 per ounce

• 10-year Treasury (^TNX): +2.6 bps to yield 1.651{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:06 p.m. ET Monday: Stock futures open slightly higher

Here’s where markets were trading Monday evening:

• S&P 500 futures (ES=F): +7.5 points (+0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,687.25

• Dow futures (YM=F): +49 points (+0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,620.00

• Nasdaq futures (NQ=F): +28.5 points (+0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,410.50

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter