U.S. equities ended Tuesday modestly lower, snapping a six-session winning streak as markets traded in a tight, range-bound session before late-day selling briefly pressured key support levels. Despite a midday slide, stocks managed to rebound into the close, with the S&P 500 finishing down 0.43%, the Nasdaq Composite lower by 0.46%, and the Dow Jones Industrial Average slipping 0.32%.

The day’s price action was choppy and largely devoid of major macroeconomic catalysts. Early weakness was attributed to lingering concerns over U.S. fiscal policy, following Moody’s recent downgrade of U.S. sovereign debt, and ongoing uncertainty around the trajectory of tariff negotiations. The 10-year Treasury yield rose to as high as 4.52% before retracing to settle at 4.48%, while the 30-year yield briefly breached the psychologically important 5.00% level before pulling back to 4.97%. The U.S. Dollar Index slipped 0.3% to 100.11 as the bond market digested conflicting headlines from Washington.

Among the day’s notable news, President Trump met with House Republicans in an attempt to shore up support for his sweeping reconciliation bill. The bill, which includes extended tax cuts and changes to Medicaid and the SALT deduction, remains contentious. Trump reiterated his opposition to Medicaid cuts, calling instead for reductions in "waste, fraud, and abuse". Meanwhile, members of the SALT Caucus continued to push for higher deduction caps, with no agreement reached on how to pay for them. The narrow Republican majority in the House means any defections could jeopardize the bill’s passage ahead of the Memorial Day deadline.

The Senate, meanwhile, advanced stablecoin legislation to a full vote in a bipartisan 66-32 decision, signaling continued regulatory momentum in the crypto space.

From the Federal Reserve, St. Louis Fed President Alberto Musalem stated that the current modestly restrictive policy stance remains appropriate given the strength of the economy and persistent inflationary pressures. He noted that higher tariffs could be a near-term inflation driver, adding another layer of complexity to the Fed's path forward.

Sector performance reflected a defensive tone throughout the session. Utilities (XLU +0.29%), Consumer Staples (XLP +0.35%), and Healthcare (XLV +0.25%) led the way, along with gold (GLD +2.41%) and silver (SLV +1.86%) as safe-haven demand picked up. Bitcoin also participated in the risk rotation, with BITO rising 1.48%.

Cyclical and rate-sensitive sectors lagged. Homebuilders (XHB -1.08%) were the worst performers, likely pressured by rising yields and slowing mortgage demand. Energy (XLE -0.96%, OIH -0.98%) slumped despite stable oil prices, while Transportation (IYT -0.91%) and Airlines (JETS -0.88%) also struggled.

Technology (XLK -0.38%) and Semiconductors (SMH -0.45%) were modestly weaker, while Communication Services (XLC +0.25%) managed to edge higher. Notably, alphabet shares dipped following what investors saw as an underwhelming keynote at the Google I/O developer conference.

Earnings were light, but home depot (HD -0.4%) drew attention after missing EPS estimates for the first time in 20 quarters. Revenue exceeded expectations, and the company reaffirmed full-year guidance, with management confirming it has no plans to raise prices in response to tariffs.

Looking ahead, Wednesday’s economic calendar includes MBA mortgage applications, the EIA crude inventory report, and a $16 billion 20-year Treasury auction. Fed officials, including Richmond Fed President Barkin and Fed Governor Bowman, will participate in a "Fed Listens" event, offering potential insights into the central bank’s latest thinking on monetary policy. Participants will also keep a close eye on the G7 meeting in Canada as Finance Ministers meet. Treasury Secretary Scott Bessent will be in attendance so tariff headlines are a potential driver for the session.

Despite Tuesday’s weakness, the broader market remains technically firm. The S&P 500 and Nasdaq continue to hold above key moving averages, and today's late-day recovery suggested buyers remain active. However, overbought conditions, stretched valuations, and policy uncertainty may cap upside in the near term.

In summary, markets spent most of Tuesday digesting recent gains and policy headlines in a choppy, indecisive session. With defensive sectors in favor and Treasuries finding intraday support, the tone was one of cautious consolidation rather than a true reversal. Eyes now turn to Washington, the bond market, and upcoming Fed commentary for the next catalysts.