NEW YORK, New York - U.S. stock markets took a well-earned breather on Tuesday, after recent heady gains. "Today we're seeing the market pull back a little bit, but equities have been on a nice run. We're probably due for a period of consolidation, some backing and filling, so to speak," Terry Sandven, chief equity strategist at U.S. Bank Asset Management told CNBC Tuesday. "Clearly, valuations are elevated. This is not a cheap market."

Although a bumpy road ahead is likely, there is light at the end of the tunnel, according to Ulrike Hoffmann-Burchardi, chief investment officer for the Americas and global head of equities at UBS Global Wealth Management.

"While we still expect near-term volatility as the impact of U.S. tariffs feeds through to the economy, we also believe the bull market is intact and expect further gains over the next year," Hoffmann-Burchardi wrote in a note to clients on Tuesday.

"Our base case remains that the U.S. central bank will resume rate cuts at the September meeting, with a total of 100 basis points of easing by early 2026," she continued. "Rate cuts have typically been supportive for stock markets during non-recession periods, and a likely weaker US dollar as a result of lower rates should offer a further tailwind."

U.S. Markets Dip

• S&P 500 fell 0.49 percent to 6,299.20, marking its third straight decline as technology and consumer discretionary stocks led losses.

• Dow Jones Industrial Average edged down 0.14 percent to 44,111.74, with losses capped by gains in healthcare and industrial stocks.

• NASDAQ Composite dropped 0.65 percent to 20,916.55, pressured by declines in mega-cap tech names.

Trading volumes were active, with the S&P 500 seeing 3.04 billion shares traded, while the NASDAQ recorded 6.475 billion shares changing hands.

Market Drivers

Analysts attributed the U.S. pullback to:

• Rising Treasury yields pressuring growth stocks

• Caution ahead of Friday's key jobs report

• Ongoing concerns about global economic growth

Outlook

Traders will be closely watching:

• Wednesday's Federal Reserve meeting minutes

• Thursday's jobless claims data

• Friday's nonfarm payrolls report for further market direction

Global Foreign Exchange Markets Show Mixed Movements on Tuesday

The foreign exchange market saw varied movements on Tuesday, with the U.S. dollar gaining against some major currencies while weakening slightly against others. Moves in either direction were limited amid cautious trading.

Key Currency Pairs

• EUR/USD (Euro / US Dollar): The euro edged up 0.05 percent to 1.1573, as traders assessed economic data from the Eurozone.

• USD/JPY (US Dollar / Japanese Yen): The dollar strengthened 0.35 percent to 147.60, amid expectations of continued monetary policy divergence between the U.S. and Japan.

• USD/CAD (US Dollar / Canadian Dollar): The greenback rose modestly by 0.03 percent to 1.3781, supported by fluctuating oil prices.

• GBP/USD (British Pound / US Dollar): Sterling gained 0.10 percent to 1.3294, as investors awaited key UK economic reports later in the week.

• USD/CHF (US Dollar / Swiss Franc): The dollar dipped 0.04 percent to 0.8074, with the Swiss franc holding steady amid cautious market sentiment.

Commodity-Linked Currencies

• AUD/USD (Australian Dollar / US Dollar): The Aussie dollar climbed 0.06 percent to 0.6469, supported by improved risk appetite in Asian trading.

• NZD/USD (New Zealand Dollar / US Dollar): The Kiwi dollar declined 0.20 percent to 0.5895, pressured by weaker-than-expected domestic economic data.

Strong gains seen in stock markets around the world 

Global stock indices delivered a solid performance on Tuesday, with major gains in most Asian and European markets. Australian and South Korean markets led the gainers, while Israel and India registered significant losses.

Canadian Market Outperforms

In contrast to U.S. markets, Canada's S&P/TSX Composite surged 2.03 percent to 27,570.08, its best single-day gain in three months. The rally was fueled by strong performances in energy and materials stocks as commodity prices rebounded. Trading volume reached 281.796 million shares.

UK and Europe

The FTSE 100 (UK) rose to 9,142.73, gaining 14.43 points, up 0.16 percent. Germany's DAX climbed 0.37 percent to 23,846.07, while France's CAC 40 dipped slightly by 0.14 percent to 7,621.04.

The EURO STOXX 50 edged up 0.14 percent to 5,249.59, and the Euronext 100 saw a modest 0.07 percent increase to 1,559.40.

Belgium's BEL 20 surged 1.23 percent to 4,665.35.

Asia and Pacific

In China the Shanghai Composite rose 0.96 percent to 3,617.60.

Japan's Nikkei 225 climbed 0.64 percent to 40,549.54.

In Hong Kong the Hang Seng Index advanced 0.68 percent to 24,902.53, while Singapore's STI Index rose 0.27 percent to 4,208.58.

The Australian S&P/ASX 200 jumped 1.23 percent to 8,770.40, and the All Ordinaries gained 1.20 percent to 9,028.80.

India's S&P BSE Sensex, however, fell 0.38 percent to 80,710.25, while in Indonesia the IDX Composite rose 0.68 percent to 7,515.19.

Malaysia's KLSE increased 0.76 percent to 1,538.64.

In New Zealand the NZX 50 surged 1.52 percent to 12,877.04.

South Korea's KOSPI soared 1.60 percent to 3,198.00, and in Taiwan the TWSE climbed 1.20 percent to 23,660.59.

Middle East & Africa

Israel's TA-125 dropped sharply by 1.89 percent to 2,993.16, while Egypt's EGX 30 surged 1.58 percent to 35,254.20.

In South Africa the JN0U gained 0.46 percent to 5,520.37.

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