Stock Market News for May 20, 2026

Wall Street closed lower on Tuesday as the Fed’s rate outlook and policy minutes dampened investors’ sentiment. The Nasdaq Composite, the S&P 500 and the Dow ended in negative territory.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.7%, or 322.24 points, to close at 49,363.88. Twenty-three components of the 30-stock index ended in positive territory, while seven ended in negative territory.

The tech-heavy Nasdaq Composite declined 0.8% to close at 25,870.71.

The major loser of the Nasdaq Composite was DoorDash, Inc. DASH after falling 4.9%. DoorDash currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 lost 0.7% or 49.44 points, to end at 7,353.61. Out of 11 broad sectors of the broad-market index, six ended in negative territory, and five ended in positive territory. The Materials Select Sector SPDR (XLB), Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) fell 2.3%, 1.6% and 1.3%, respectively, while the Health Care Select Sector SPDR (XLV) rose 1.1%.

The fear gauge, the CBOE Volatility Index (VIX), increased 1.4% to 18.06. A total of 19.45 billion shares were traded on Tuesday, higher than the last 20-session average of 18.38 billion. The S&P 500 posted 18 new 52-week highs and 22 new lows, while the Nasdaq Composite recorded 51 new highs and 180 new lows.

Fed Rate Outlook in Focus

The Federal Reserve is expected to keep the interest rates on hold at the upcoming meeting. The probability of keeping the interest rates within the current target range of 350-375 basis points as per CME Group’s FedWatch tool was 96.7% on May 19, down from 99% the week prior.

The probability that the Fed would cut rates to a 325-350 basis points target at the next meeting increased to 3.3% from 1% the week prior.

Investors recently increased their bets for Fed hikes later this year. For December, the chance of a 25-basis-point hike jumped to 41.7% while the chance of a 50-basis-point hike soared to 15.7% as of last week, according to a Reuters report.

The market is waiting for the Federal Reserve’s last meeting minutes to be released on Wednesday. In the minutes, the market participants can gain more insight into policymakers’ views regarding issues such as inflation, the economy and monetary policy going forward.

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