U.S. stocks rose on Tuesday as investors cheered a rebound in tech stocks and a rebound from a sharp rise in oil prices, with renewed focus on interest rates and the state of the U.S. economy.
The Nasdaq Composite Index (^IXIC) rose about 1.2% as tech mega-cap stocks recouped some of their losses from the previous session. The benchmark S&P 500 (^GSPC) rose about 0.7%, and the Dow Jones Industrial Average (^DJI) rose about 0.2%.
Stocks are expected to resume the upward trend of recent months as Monday’s headwinds ease and oil prices fall as tensions in the Middle East ease some.
China’s failure to roll out another massive stimulus package on Tuesday also put pressure on oil prices, a surprise to investors who had hoped for further fuel to an unprecedented rally. Ta. Hong Kong stocks (^HSI) fell more than 9% as a torrid rally in Chinese stocks fueled by stimulus faded.
Some of the Magnificent Seven stocks regained ground lost amid negative headlines, with Amazon (AMZN), Apple (AAPL), and Alphabet (GOOG, GOOGL) all rising. Meanwhile, Nvidia (NVDA) closed the session with gains, rising another 4% on Tuesday as the chip giant’s partner Honghai cited “extraordinary” AI demand.
Investors also focused on Fed policy, as market hopes for a huge rate cut remained dashed.
New York Fed President John Williams told the Financial Times on Tuesday that the Fed’s policy is “well positioned” to ensure a “soft landing” for the economy. Meanwhile, Federal Reserve President Adriana Kugler said data will continue to drive interest rate decisions.
Read more: What Fed Rate Cuts Mean for Bank Accounts, CDs, Loans, and Credit Cards
Those comments have turned investors’ attention to Thursday’s Consumer Price Index (CPI) inflation report, which could provide further clues about the future direction of interest rates. It turns out.
On the corporate front, PepsiCo (PEP) had a strong earnings season, posting an unexpected decline in quarterly sales and lowering its 2024 sales growth forecast. The snack and beverage giant’s stock rose slightly in afternoon trading.
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