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S&P 500 falls slightly Tuesday, but notches 7th-straight winning month in August

Stocks edged lower on Tuesday as the S&P 500 wrapped up its seventh-straight month of gains at just below all-time highs.

The Dow Jones Industrial Average slipped 39.11 points, or 0.11%, to close at 35,360.73.

The S&P 500 lost 0.13% to finish at 4,522.68.

The Nasdaq Composite was down just 0.04% to 15,259.24.

Tuesday marked the last trading day of August, and major averages posted solid gains for the period. The S&P 500 rose 2.9% this month, while the tech-heavy Nasdaq Composite climbed roughly 4% for its third winning month in a row. The blue-chip Dow lagged but still added 1.2%.

For the S&P 500, this is the longest winning streak since a 10-month run ending in December 2017. August was also the benchmark’s 9th positive month in the last 10. The index notched its 53rd record close of 2021 on Monday, and some on Wall Street believe more upside is ahead.

“We believe that the momentum toward reopening and recovery is intact and that there is further upside to equities,” wrote Mark Haefele, chief investment officer of global wealth management at UBS, in a note. “The S&P 500 rally is underpinned by robust earnings growth ... With the economic recovery broadening, we expect cyclical sectors, including energy and financials, to take the lead.”

Haefele sees the S&P 500 rising another 1.6% from here to 4,600 by year-end and then running to 5,000 by the end of 2022.

The strong run for the S&P 500 has come even as the delta variant of Covid-19 has raised concerns about the path for the economic recovery. On Tuesday, Google-parent Alphabet pushed back its voluntary return to office to January from mid-October.

The S&P 500′s 20% gain this year has come without even a 5% pullback. The broad equity benchmark has more than doubled since its pandemic low in March 2020.

Investors are awaiting a key jobs report on Friday ahead of the Labor Day weekend. Economists polled by Dow Jones expect 750,000 jobs were created in August and the unemployment rate fell to 5.2%.

· European stocks close lower on inflation fears but post seventh straight month of gains

European stocks closed lower on Tuesday, as investors digested the latest economic data from the region and beyond.

The pan-European Stoxx 600 index closed down 0.5% provisionally. However, the index was up over 1% month-on-month, marking its seventh consecutive month of gains. That’s despite August typically being a quieter month for trading given the summer vacation period.

Markets turned lower on Tuesday following the release of euro zone inflation data for August which showed consumer prices increased by 3% this month from a year ago, according to preliminary estimates, far above expectations and the European Central Bank’s 2% target. The data will put pressure on the central bank to address inflation concerns at a key meeting next week.

Reference: CNBC