The S&P 500 and Nasdaq ended lower on Tuesday, with indications from the Bank of England that it would support the country's bond market for just three more days adding to market jitters late in the session.

Trading was volatile, with investors cautious ahead of key US inflation data and the start of third-quarter earnings later this week.

The Dow ended higher, helped by Amgen shares, which jumped 5.7 percent after a report that Morgan Stanley upgraded the drugmaker's stock to "overweight" from "equal weight."

All three major indexes fell in afternoon trading after Bank of England Governor Andrew Bailey told pension fund managers to finish rebalancing their positions by Friday when the British central bank is due to end its emergency support programme for the country's bond market.

"What caused the latest downturn was an announcement the Bank of England was going to stop supporting the gilt (UK bonds) market in three days," said Randy Frederick, managing director, trading and derivatives at Charles Schwab in Austin.

Earlier on Tuesday, the Pensions and Lifetime Savings Association urged the BoE to extend the bond-buying programme until October 31 "and possibly beyond."

Growth and technology stocks underperformed as US Treasury yields rose amid concern that US inflation data this week will not stop the Fed's rapid hiking of interest rates. The S&P technology sector was down 1.5 percent.

The producer price index report is due Wednesday and consumer price index data is due Thursday.

The Dow Jones Industrial Average rose 0.12 percent, to 29,239, the S&P 500 lost 0.65 percent, to 3,589 and the Nasdaq Composite dropped 1.1 percent, to 10,426.

The Fed has been aggressively raising rates to curb inflation and is expected to continue with more increases into next year.

Stocks have been hit in recent weeks by worries about how aggressive the Fed may still need to be with hiking rates and the potential impact on the economy.

The S&P banks index was down 2.6 percent ahead of quarterly results from some major banks later this week. The reports are expected to kick off the third quarter reporting period for S&P 500 companies.

Adding to recent fears about the economy, the International Monetary Fund predicted a meager 1.6 percent growth in the US economy this year. (Reuters)
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Last updated: 2022-10-12 HKT 10:16