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The market has already priced in all the good news. Now that the fourth-quarter earnings period has ended, investors are waiting for a catalyst, good or bad.

Stocks were down on a day with little news. The market seems to have made a trip through no-man’s-land.

The Dow Jones Industrial Average fell 104.41 points, or 0.32%, to close at 33,066.96. The S&P 500 slid 12.54 points, or 0.32%, to end at 3,958.55, and the Nasdaq Composite edged down 14.25 points, or 0.11%, to close at 13,045.39. The biggest gainer in the S&P 500 was DXC Technology (DXC), an IT-consulting firm that saw shares gain 9%, after bullish analyst commentary.

Twenty one of the Dow’s 30 component stocks ended the day in the red, and a few large-capitalization stocks dragged down the S&P 500, but the drop today was marked by its breadth. Just over half of all S&P 500 stocks were down on the day, according to FactSet data, as with Monday’s market. The index as a whole has struggled to gain traction of late; it’s down a bit less than 1% since setting an all-time high in mid-March and up less than 1% since early February.

That’s no surprise, as the market is pricing in a lot of good news. Stock valuations are relatively expensive. The explosion of earnings and economic activity expected for the year—as trillions of dollars of fiscal stimulus shores up demand and states reopen—is priced into the market. Investors have recognized that economic data such as manufacturing activity has grown at year-over-year rates not seen since before 2012, and personal income has recently been running at pre-pandemic levels, according to Morgan Stanley.

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“It is reasonable to expect a slowing in the year-over-year, and sequential rate of change into second-quarter 2021,” wrote Mike Wilson, chief U.S. equity strategist at Morgan Stanley.

Investors are looking for the next catalyst—positive or negative. Earnings season for fourth-quarter results is over, and the amount in government spending to pull the economy out of its hole has likely peaked. Fast reopenings seem to be a foregone conclusion, as Covid-19 vaccinations have run at a quick pace.

“We’re at a crossroads,” JJ Kinahan, chief market strategist at TD Ameritrade, told Barron’s. “Everyone’s trying to figure out what’s next. Part of it is a wait-and-see.”

Stocks may trade sideways in the near term; investors weren’t even moved by upbeat economic data Tuesday. March consumer confidence came in at a reading of 109.7, topping estimates for 97, and above February’s reading of 90.4. That’s not a surprise with stimulus checks distributed and households feeling better about employment.

Within the market, though, value stocks were resilient, while growth stocks were hit particularly hard. The Vanguard S&P 500 Growth Index Fund ETF (VOOG) fell 0.56%, while its value counterpart (VOOV) lost less than a 10th of a percentage point. The difference between the two groups was investor wariness for higher rates.

The 10-year Treasury yield hit 1.77% before settling to close at 1.73%. It had ended Monday at 1.72%. Growth stocks are particularly vulnerable in this environment, because these companies expect the bulk of their profit down the line, and rising rates erode the value of future cash flows. Value stocks for the most part represent companies in their earnings prime now; higher rates reflect a strengthening economic outlook, a tailwind for the earnings of established companies. Rates can keep ratcheting higher, as the 10-year Treasury note’s yield is still below the rate of expected inflation.

For more gains in large-cap land, patience is required.

Write to Jacob Sonenshine at