The indexes struggled Tuesday, but the action was worse than it looked. Nervousness about Wednesday's Federal Open Market Committee interest rate decision caused some rotation out of growth and speculative names again, but big caps held up relatively well, which kept the losses in the indexes fairly mild.
Under the surface, breadth was two to three negative, but was even worse in the names that have been leading recently. A good example is the growth names in the ARK Innovation exchange-traded fund (ARKK) . Of the 73 stocks that have been bought recently, only 10 were higher, while 63 lost ground. Speculative small caps were similarly lopsided, and the pockets of momentum shrunk quite a bit.
Leadership was primarily in oil, but there were some social media-driven plays and a few other odds and ends that did OK for traders. Stock picking narrowed quite a bit, but did not totally disappear.
On Wednesday, the FOMC announcement is at 2 p.m. ET, which means we are going to have plenty of random and slow action. This decision and the press conference by Fed Chief Jerome Powell that follows are going to be of more importance than usual, because there is some pressure on the Fed to tamp down its dovishness and to start to look ahead to some tightening. Even if the Fed persists in the message that inflation is "transitory," that doesn't mean that it won't sound more hawkish.
The market is nervous about, and that is why we had poor action today.
Have a good evening. I'll see you tomorrow.