A note of caution is creeping into markets. Stocks stumbled Tuesday, with the tech-heavy Nasdaq composite leading declines. Wall Street’s fear gauge, the VIX index of stock volatility, jumped.
Indexes are close to record highs after a rapid run-up since April. Speaking in Hong Kong on Tuesday, Morgan Stanley Chief Executive Ted Pick and other finance bosses warned the winning streak has made stocks vulnerable to a pullback. Among the risks: trade tensions, bubble worries and trouble in credit markets.
Investors have also been unsettled by indications that the Federal Reserve might not cut interest rates again next month. On Monday, Fed governor Lisa Cook described the central bank’s December meeting as “live.” Two other officials, Mary Daly and Austan Goolsbee, said they had open minds as they weigh a slowing labor market against above-target inflation.
Investors dug into earnings from Pfizer, Uber and others. Advanced Micro Devices was due to report results after the close.
The Dow Jones Industrial Average fell 251 points to close down 0.5%. The S&P 500 pulled back 1.2% and the Nasdaq retreated just over 2%.
The Stoxx Europe 600 lost less than 1%, while Japan’s Nikkei 225 dropped 1.7%.
Treasury prices rose, pulling down yields, while the WSJ Dollar Index edged up.
