Stock Rally Pauses After Record Close

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U.S. stocks fell Tuesday, retreating from last week’s record highs.

The S&P 500 fell 0.4%, signaling a potential halt to its recent winning streak. On Friday, the broad-based index closed at a record high for the seventh consecutive trading session, its longest record-setting streak since 1997.

The Dow Jones Industrial Average slid 274 points, or 0.8%, while the technology-heavy Nasdaq Composite declined 0.1%. U.S. markets were closed Monday for the Independence Day holiday.

There wasn’t a clear catalyst for Tuesday’s drop, which came during light summer trading volumes. Thin trading activity can exacerbate volatility, as many investors are on the sidelines.

U.S. stock indexes had ground higher in recent weeks, lifted by signs of the economy rebounding and the labor market recovering. Inflation concerns have also eased, and major central banks have signaled that they will leave accommodative monetary policies in place for now. Investors say they are now looking for fresh catalysts, such as strong corporate earnings reports or more fiscal stimulus, to power the next leg of the rally in stocks.

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