In a decisive rally, US stocks soared into positive territory on Tuesday, buoyed by a key inflation report revealing a largely stable pricing landscape just ahead of the Federal Reserve’s anticipated final policy meeting of 2023.
The Dow Jones Industrial Average (^DJI) notched a remarkable gain of approximately 0.5%, surging by more than 150 points and securing its third-highest close in history.
Similarly, the S&P 500 (^GSPC) experienced an upward trajectory, closing the day with an approximately 0.5% gain. Leading the charge, contracts tied to the tech-heavy Nasdaq Composite (^IXIC) displayed robust performance, advancing by around 0.6%. This surge comes on the heels of Monday’s closure, where all three major indices reached their highest levels since early 2022.
In a report by Yahoo Finance’s Alexandra Canal, the Consumer Price Index (CPI) indicated a slight uptick in prices at 0.1% over the previous month, while showing a 3.1% increase over the same period last year.
Anticipation is rife among investors regarding a potential pause in rate hikes at the conclusion of the Federal Reserve’s two-day meeting commencing on Tuesday. Despite this expectation, data from CME FedWatch suggests traders are scaling back their bets on a rate cut in March.
While consumer inflation is anticipated to maintain its flat trajectory for the second consecutive month, concerns arise over the “core” reading, excluding food and energy prices, which could exhibit more resilience. A stickier “core” reading may prompt investors to reassess when the Federal Reserve might consider initiating rate cuts.
Following the release of the inflation report, US bond yields experienced a slight retreat. The 10-year Treasury yields (^TNX) dipped by approximately 3 basis points, settling near 4.21%.
Shifting focus to individual stocks, Oracle (ORCL) faced a setback as its shares plummeted by over 12%. The decline followed the revelation that the software giant’s second-quarter sales fell short of estimates, contributing to market fluctuations.
With the Federal Reserve’s policy meeting in progress, market watchers are closely monitoring the central bank’s decisions and statements, seeking insights into the trajectory of interest rates and the broader economic outlook.
In conclusion, the day’s impressive rally in US stocks underscores the market’s resilience and optimism, positioning investors for potential opportunities amid the evolving economic landscape.
Source: Yahoo Finance
