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The TSX, S&P 500 and Dow fell on Tuesday after recent strong gains, while the Nasdaq ended at an all-time high for a second straight day after briefly rising above the 10,000 mark for the first time.

The S&P/TSX Composite Index fell 141.17 points, or 0.88%, at 15,833.74. Activity was mixed across sectors, with energy stocks leading decliners with a drop of 3.51%.

Investors eyed this week’s Federal Reserve meeting. While no major policy announcements are expected when the U.S. central bank wraps up its two-day meeting on Wednesday, investors will scrutinize its remarks on the health of the economy, which has been reopening after coronavirus-related closures.

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The Nasdaq’s gains came a day after the index became the first of Wall Street’s main indexes to confirm a new bull market after hitting a low on March 23. The benchmark S&P 500 fell back into negative territory for the year after erasing Mondays gains.

“It strikes me as maybe a reflexive selloff as a result of a tremendous rally over the past week. There’s no news headline that screams bearish catalyst to me. But conversely, other than the nonfarm payrolls data, the past two weeks haven’t had super bullish catalysts either,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York. “In the grand scheme of things, it seems like the market has caught a bullish fever, and it’s feeding on itself.”

The rally in U.S. stocks accelerated last week after strikingly upbeat May jobs data strengthened views that the worst of the economic fallout from the pandemic was over.

Financial, industrial and energy stocks, which have surged in recent weeks on hopes of an improved economic outlook, were the biggest drags on the benchmark S&P 500 on Tuesday.

Unofficially, the Dow Jones Industrial Average fell 296.99 points, or 1.08%, to 27,275.45, the S&P 500 lost 25.06 points, or 0.78%, to 3,207.33 and the Nasdaq Composite added 29.01 points, or 0.29%, to 9,953.75

The S&P 1500 airlines index tumbled, while cruise operators Carnival Corp and Norwegian Cruise Line Holdings Ltd fell following their recent sharp recovery amid recent signs of a pickup in global travel.

Despite energy equities on the decline Tuesday, crude oil prices rose, as optimism about recent commitments from major oil producers to curb production offset concerns about a resurgence in coronavirus cases.

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Brent crude rose 38 cents, or 0.9%, to settle at $41.18 a barrel. West Texas Intermediate crude (WTI) rose 75 cents, or 2%, to end at $38.94 a barrel.

The Organization of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+, on Saturday agreed to extend record cuts of 9.7 million barrels per day (bpd) until the end of July.

However, Saudi Arabia, Kuwait and the United Arab Emirates said they would not maintain supplemental reductions that amount to more than a million barrels of daily supply.

Supportive for the market, Libya said it declared force majeure on some exports from its Sharara oilfield on Tuesday, after production was briefly halted by an armed group just days after output had resumed following a blockade that had lasted months.

“That has helped to mitigate any further falls. They were in the process of restarting, which of course would have added to the oversupply situation,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

Fuel demand has recovered from April’s collapse brought on by lockdowns to control the pandemic. Analysts have said, however, that the oil market’s rapid surge to more than $40 a barrel may be banking an overly optimistic view of consumption.

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The coronavirus has killed more than 400,000 people worldwide, and the number of new daily cases hit a record on Sunday as the pandemic has yet to peak in central America, the World Health Organization (WHO) said on Monday.

Goldman Sachs raised its 2020 forecast for Brent to $40.40 a barrel and WTI to $36 but warned that prices are likely to pull back in the coming weeks because of demand uncertainty and inventory overhang.

Read more: Stocks that saw action Tuesday - and why

Reuters, Globe staff

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