Here Are 3 Hot Things to Know About Stocks Right Now

  • Stocks fell Tuesday as Federal Reserve Chairman Jerome Powell said he and his colleagues on the central bank were "grappling" over whether to lower interest rates.
  • Allergan (AGN - Get Report) shares surged after the company agreed to a takeover from biopharmaceutical company AbbVie (ABBV - Get Report) . AbbVie is Real Money's Stock of the Day.
  • FedEx  (FDX - Get Report) filed a lawsuit against the U.S. government arguing new trade regulations put an "impossible burden" on the world's biggest package delivery company to monitor the origins of shipments to and from the United States.

Wall Street Overview

Stocks tumbled Tuesday as Federal Reserve Chairman Jerome Powell said he and his colleagues were "grappling" over whether to lower interest rates.

The Dow Jones Industrial Average recorded its biggest one-day loss since May 31, falling 179 points, or 0.67%, to 26,548. The S&P 500 was off 0.95%, and the Nasdaq slipped 1.51%.

Microsoft (MSFT - Get Report)  was the Dow's biggest loser, falling 3.2% after Jeffries analyst John DiFucci said in a note that the software giant's shares are "materially overvalued" and overlook some substantial risks. 

"The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation," Powell said during an event at the Council of Foreign Relations in New York. "Many FOMC participants judge that the case for somewhat more accommodative policy has strengthened. But we are also mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment."

Doing so, Powell added, "would risk adding even more uncertainty to the outlook. We will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion."

President Donald Trump has been a harsh critic of the Fed for not cutting interest rates and continues to maintain he could fire Powell. 

Powell addressed the issue of the board's independence during his remarks. "The Fed is insulated from short-term political pressures -- what is often referred to as our 'independence," he said. "Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interests."

Traders have been pricing in a 100% chance of a cut in the Fed Funds rate in July, and a 73.3% chance of two more cuts between now and the end of the year.

Meanwhile, the Conference Board said its consumer confidence index declined to 121.5 in June, down from May's recording of 134.1. Economists had expected a decline to 131.1.

"After three consecutive months of improvement, Consumer Confidence declined in June to its lowest level since September 2017 (Index, 120.6)," said Lynn Franco, senior director of economic indicators at the Conference Board, in a statement. "The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions. Consumers' expectations regarding the short-term outlook also retreated. The escalation in trade and tariff tensions earlier this month appears to have shaken consumers' confidence."

The Commerce Department said new home sales dropped 7.8% to a seasonally adjusted annual rate of 626,000 units last month, the lowest level since December. April's sales pace was revised up to 679,000 units from the previously reported 673,000 units. Economists had called for new home sales to rise 1.9% to a pace of 680,000 units in May.

In addition, the Congressional Budget Office's 2019 Long-Term Budget Outlook said that large budget deficits over the next 30 years are projected to drive federal debt held by the public "to unprecedented levels" from 78% of gross domestic product (GDP) in 2019 to 144% by 2049.

In the energy sector, Brent crude contracts for August delivery, the global benchmark, were up 8 cents and changing hands at $64.26 a barrel. West Texas Intermediate crude contracts for the same month, which are more tightly linked to U.S. gas prices, were 7 cents lower at $57.83 per barrel.

Allergan (AGN - Get Report) shares surged 24.4% to $162.43 after it agreed to a takeover from biopharmaceutical company AbbVie (ABBV - Get Report) . AbbVie is Real Money's Stock of the Day. AbbVie shares slumped 16.3% to $65.70.

FedEx  (FDX - Get Report) filed a lawsuit against the U.S. government arguing new trade regulations put an "impossible burden" on the world's biggest package delivery company to monitor the origins of shipments to and from the United States. Shares were down 3% to $156.01. The company reported better-than-expected earnings per share after the bell.

Amazon.com's  (AMZN - Get Report) fifth annual Prime Day will begin at midnight ET on Monday, July 15, the online retailing giant said. The company said the event will include more than a million deals around the world. Shares were off nearly 1.9% to $1,878.27.

 Amazon and Microsoft are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.

Shares of Botox Maker Allergan Get a Lift