U.S. equities closed mostly lower on Tuesday, but recorded monthly gains, as investors continued to evaluate the latest policies from the White House, while a slew of companies posted quarterly results.
The Nasdaq composite erased earlier losses, closing just above breakeven as the iShares Nasdaq Biotechnology ETF (IBB) gained around 2.8 percent after President Donald Trump met with several health care industry executives.
"The comments made [by Trump] about speeding up FDA approval I think are what are helping the biotechs," said Robert Pavlik, chief market strategist at Boston Private Wealth. "I think the broader market is still concerned about the immigration issue."
The Dow Jones industrial average fell about 100 points, with Goldman Sachs contributing the most losses.
"This is a market that is a bit disappointed because it hasn't heard much about what got investors excited in the first place," said Quincy Krosby, market strategist at Prudential Financial, referring to Trump's proposed tax cuts, government spending and deregulations.
The S&P 500 slipped 0.1 percent, with industrials leading decliners.
Major indexes in JanuarySource: FactSet
"This is a period of reconciling the expectations from the Trump administration's policies and the reality," said Bill Northey, chief investment officer at the Private Client Group at U.S. Bank, adding that some of the administration's measures and a "mixed" earnings season has "taken some of the wind out of the sails of this rally."
On Monday, investors and traders around the globe focused on an executive order — signed late Friday — that barred entry of certain nationals into the U.S. Stocks suffered their worst trading day of the year, with the Dow falling around 120 points, while the S&P dropped more than 0.6 percent. Equities in the U.S., however, have rallied considerably since Trump's election.
"Investors definitely need to be aware that the markets behaved very suddenly towards pricing in heavy premiums following the US election outcome based on fiscal promises, but so far it is the far-right agenda that we have seen the most movement on from the Trump administration," Jameel Ahmad, vice president of research at FXTM, said in a note.
"I do believe that investors need clarity on how the Trump administration will move forward with fiscal stimulus and infrastructure spending rather than blacklisting certain nationals and getting into a war of words with Mexico over the wall, otherwise there is a risk of the stock markets entering a correction," he said.
U.S. Treasurys gained ground, as the benchmark 10-year note yield fell to 2.44 percent and the short-term two-year note yield slipped to 1.2 percent. The U.S. dollar, one of the best-performing assets since the election, fell nearly 0.8 percent against a basket of currencies.