Stocks in the red, small caps experience worst day in two weeks

Stocks are trading in the red ahead of the release of the Fed's Beige Book. Yahoo Finance markets reporter Jared Blikre takes a closer look at the what's driving the action.

Video Transcript

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- Now, let's go to Yahoo Finance's Jared Blikre for a check on the markets. Hey, Jared.

- Hey there. As we can see, red arrows across the board. In fact, all over across the world. Don't see that every day. Dow down about 0.8%. S&P 500 and the NASDAQ just a tad more. The small caps down about 1.7%, so it has been rough for the small caps recently as well as the Dow. And as we know, we've been talking about the AI trade really the one gleaming spot of hope in the market right now.

Here's what's happening in sector action. The only thing green is defensive, so take that with a grain of salt. We got staples, utility, real estate, all just slightly positive here. Consumer discretionary, that's XLY, that is taking it on the chin. That's down 2%. Followed by financials, industrials, and energy. Also materials in there. Are all of those underperforming, so it looks like a pretty strong value or lack of value in the market right now, at least as-- I would say they were thinking of the market that way.

Anyway, let's go to our leaders in sentiment. We have BITO. That's a Bitcoin ETF. That's down about 3.8%. Kind of shows you where the fringe money is or is not right now. KRE is a regional bank ETF. That's down 0.4%, so we're seeing kind of a resurgence there.

And I'd also point out, it is the end of the month, and that just means there can be some portfolio rebalancing. Anytime you have a huge move up as we've had in certain stocks, sometimes you see some of that given back at the very end, and it doesn't mean a whole lot. It could be the case, but just keep that in mind.

Here is the S&P 500 over the last three years. I just want to remind everybody, we are still in a giant trading range. Even the NASDAQ, which has broken more to the upside, still pretty much in a giant trading range, although this is positive price action right here. So take all of this with a grain of salt.

We've got the US dollar perking up, but as long as that stays under wraps, we've got the potential here for continued momentum to the upside. But it's going to be dicey, as we know.

- We'll be keeping an eye on that. Great stuff there. Thanks so much, Jared.