The Dow Jones Industrial Average dived in the last hour of trading, falling 1% at the close. The Dow and other indexes closed near session lows as the S&P 500 fell below a key level.
On Tuesday, Minneapolis Federal Reserve President Neel Kashkari found inflation "still too high" after retail sales came in stronger than views. According to Kashkari, the Fed is "a long way away from cutting rates."
Weakness in China's economy also weighed on the U.S. stock market. Additionally, fresh U.S. data showed that confidence in homebuilder stocks weakened in August. Bank stocks fell on Fitch Rating's warning. Regional banks also fell on fresh fears of bank stress.
The S&P 500 finished the day at a session lows along with the Nasdaq. Both indexes were lower by over 1% at the closing bell. The S&P closed below the 50-day moving average for the first time since March 28.
Volume fell on the NYSE and rose on the Nasdaq from Monday's totals, according to preliminary data.
The small-cap Russell 2000 was down over 1% at closing bell as well. The Innovator IBD 50 ETF fell 0.8%, dropping further below its 200-day moving average on Tuesday.
Crude oil fell 1.8% to $80.99 a barrel. The yield on the benchmark 10-year Treasury note rose 3 basis point to 4.22%.
Retail sales rose 0.7% in July, higher than views for an increase of 0.4%, according to Econoday. June's number was revised to a 0.3% increase, up from 0.2%. The National Association of Home Builders/Wells Fargo Housing Market Index fell to 50 from July's 56.
Dow Jones Stocks
As a big week of retail earnings gets underway, Walmart is 2% above its 50-day line with earnings due Thursday. Target is announcing quarterly results Wednesday.
Home Depot rose after earnings came out this morning. The stock is attempting to break out at 334.97 from a cup with handle. Shares closed below the entry.
JPMorgan Chase fell more than 2% after a warning from rating agency Fitch Ratings that banks are not out of the woods yet.
The warning follows Moody's rate cut for several smaller banks last week. Fitch cut its rating on the banking industry in June. Fitch says if it decides to downgrade the group another point, it could bring over 70 banks, including JPMorgan Chase, under its scrutiny for a possible individual downgrade.
Among financial stocks, Wells Fargo fell below the 50-day line but remains in a base, while Charles Schwab is testing support at the same key level, also working on a base. The SPDR S&P Regional Banking ETF fell 3.4%.
Futures: Market Rally Breaks Key Levels
Stocks Moving Today
Outside the Dow Jones index, On Holding dived after earnings fell short. Cardinal Health, which also reported results, also fell. The stock closed below the 50-day line Tuesday.
Warren Buffett's latest picks for Berkshire Hathaway are in homebuilding. His new buys, D.R. Horton, Lennar and NVR rose, finding support at the 50-day line in the stock market today.
Synopsys is in a cup with handle ahead of earnings Wednesday with a buy point of 465.67. Shares are trying to retake the 50-day line.
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