U.S. stocks turned red late Tuesday morning after investors initially bought the dip following the S&P 500′s worst day since May.
Gains were kept in check as investors awaited the end of the Federal Reserve’s two-day meeting, which kicked off Tuesday.
The Dow Jones Industrial average lost 17 points, or 0.05%. The S&P 500 fell 0.9% and the Nasdaq Composite was flat.
Asian markets were stable overnight, helping sentiment in the U.S. after fears grew Monday that the liquidity crisis at Chinese developer Evergrande would lead to a global contagion. Hong Kong’s Hang Seng Index rose 0.5% after dropping more than 3% on Monday.
“There has already been a sharp bounce off Monday’s intraday low and the catalysts for the correction have yet to be resolved, so we would expect a bit more indigestion and begin adding risk back into the market on any further weakness as the bottoming process begins,” Canaccord Genuity Chief Market Strategist Tony Dwyer said in a note Tuesday.
On Monday, the S&P 500 slid 1.7% for its worst day since May 12. The Dow Jones Industrial Average plummeted 614 points, or 1.8%, for its biggest one-day drop since July 19. The Nasdaq Composite shed 2.2%.
Tuesday’s comeback was broad, but slight in magnitude with most major stocks inching only slightly higher. Uber shares were a standout, jumping 6% after raising its outlook for the third quarter.