Red Alert on Wall Street: Stocks Tumble With Apple Leading the Retreat

Tuesday's closing price of U.S. equities was lower due to pressure from banks on mixed results from Morgan Stanley and Goldman Sachs, as well as sell-offs in Apple and Boeing that affected the S&P 500.

Goldman Sachs' stock closed 0.7% higher after reporting a 51% increase in profit, while Morgan Stanley's shares fell 4.2% to a low point that was reached when it announced a lower quarterly profit.

The S&P 500 banking index fell 1.2% to a low of more than one month on Friday following the release of weaker profitability reports by other significant US banks.

After a federal court banned JetBlue Airways' proposed $3.8 billion acquisition of Spirit Airlines, opens new tab, the airline fell 47%, siding with the U.S. Department of Justice: Customers will suffer from the agreement.

Days after being surpassed by Microsoft as the most valuable company in the world, Apple lost 1.2% after providing exceptional discounts on its iPhones in China in response to fierce competition there.

Fed Governor's Caution Spurs Market Correction

Governor Christopher Waller of the Federal Reserve expressed more confidence that inflation will follow the Fed's 2% objective, but he also downplayed optimism, saying that there is no need to decrease interest rates quickly. In response, traders revised their projections, delaying the expected beginning of rate reductions in March along with an increase in U.S. yields on Treasury securities.

While valuations are stretched, the present market dynamics indicate a larger consolidation, according to Baird's Ross Mayfield, an investment strategy analyst. This correction signals a departure from unduly optimistic investor expectations surrounding the Fed's propensity to cut rates.

Ten of the S&P 500 sector indices had declines, with the energy sector seeing the biggest reduction (2.4%), followed by the materials sector (1.2%). The technology index increased by 0.4%.

The S&P 500 finished the day at 4,765.98 points, down 0.37%. While the Dow Jones Industrial Average dropped 0.62% to 37,361.12 points, the Nasdaq fell 0.19% to 14,944.35 points.

With 13.0 billion shares moved, there was comparatively high volume on U.S. exchanges compared to the preceding 20 sessions' average of 12.1 billion shares.

Advanced Micro Devices surged 8.3% following the announcement by Barclays analysts that they would profit from the development of artificial intelligence and that they had boosted their price forecasts for AMD and many other chipmakers. Rival company Nvidia (NVDA.O), which is larger, saw a record-breaking 3% increase.

Following the Federal Aviation Administration's decision to prolong the suspension of its 737 MAX 9 aircraft indefinitely and Wells Fargo's downgrade of the company to "equal weight" from "overweight," Boeing, fell almost 8% to a two-month low.

In the S&P 500 (.AD.SPX), advancing equities were outweighed by declining ones by a ratio of 2.6 to 1. The Nasdaq had 63 new highs and 182 new lows, while the S&P 500 saw 23 new highs and two new lows.