4:06pm: Bitcoin surpasses $30K
The Dow closed Tuesday up 99 points, 0.3%, at 33,685, while the Nasdaq Composite fell 52 points, 0.4%, to 12,032 and the S&P 500 ended flat at 4,109. The small-cap Russell 2000 index added 15 points, 0.8%, to 1,787.
The major indexes all fell in the waning hours of the session, as investors braced themselves for the CPI and PPI data released Wednesday and Thursday morning, respectively.
“The data coming forward this week is important in that it will be one of the last sets of data to inform the May 3 Federal Reserve meeting," US Bank Wealth Management’s William Northey said. "And, as the Federal Reserve evaluates their battle against inflation and the appropriate pace of monetary policy, market conditions have already begun to lean back towards an additional rate increase at the next meeting."
“This set of data will certainly provide context for the Federal Reserve to evaluate where they are in that battle,” Northey added.
Bitcoin, meanwhile, enjoyed a banner day, jumping more than 3% to $30,175.69, its highest point since June 2022.
2:25pm: Yellen: global economy better than expected
US Secretary of the Treasury Janet Yellen said she believes the American banking system remains resilient despite recent pressure on financial institutions, while the global economy is better off than some expected.
Yellen said that the US banking system remains strong and resilient with solid capital and liquidity.
“I’ve not really seen evidence at this stage suggesting a contraction in credit, although that is a possibility,” she said.
Yellen noted that the US economy was performing “exceptionally well,” pointing to job creation, moderating inflation, and robust consumer spending.
By early afternoon, the Dow was up 0.3%, while the S&P 500 turned green and the tech-heavy Nasdaq had regained ground but was still down 0.1%.
12.05pm: Stocks little changed ahead of CPI and PPI data this week
US stocks were mixed in noon trading as investors traded cautiously ahead of key inflation data due out this week.
At midday, the Dow gained 138 points to 33,724, while the S&P 500 added 5 points at 4,114 and the tech-heavy Nasdaq slipped 49 points to 12,035.
“The market is saying that peak tightening is behind us, and now the data has to confirm that that’s the direction that we’re heading in,” GLOBALT Investments senior portfolio manager Keith Buchanan said.
Notable movers included shares of WW International, Inc, which soared 42% after Goldman Sachs upgraded the stock to ‘Buy’ from ‘Neutral’, saying its share price could triple following the diet company’s new foray into obesity medications.
10:50am: CarMax, Innovative Eyewear flying high
The Dow had strengthened by midmorning, up 0.2%, while the other two major indices were in the red.
Meanwhile, CarMax’s shares were up 11% at $70.72 after its fourth-quarter earnings beat expectations following steps to increase efficiencies in the face of declining demand for pre-owned vehicles.
The company's sales declined by 25.6% to $5.7 billion in the three months ended February 28, 2023, missing analyst estimates of $6.04 billion while net earnings per diluted share came in at $0.44, down from $0.98 a year earlier but well ahead of Refinitiv estimates of 24 cents per share.
Another big gainer: Innovative Eyewear, which soared 146% to trade at US$3.57 after it announced the launch of ‘the first’ ChatGPT enabled smart-glasses.
9:40am: Stocks muted at the open
US stocks opened largely unchanged on Tuesday as investors sat tight ahead of a slew of economic data, including a key inflation report due Wednesday and the kickoff of earnings season with several big banks set to report before the market opens on Friday.
At the open, the Dow Jones was up 0.1% at 33,608 points, the S&P 500 was flat at 4,110 points, and the Nasdaq had shed 0.2% at 12,066 points.
FOREX.com market analyst Fiona Cincotta said investors were holding back from making aggressive bets ahead of Wednesday’s consumer price index (CPI) report. She added that recession fears were also on the rise after a series of weaker-than-expected data points in recent weeks.
“However, signs that US inflation is cooling by more than expected could help rein fears of another rate hike and recession worries,” Cincotta said.
Meanwhile, Bitcoin was up 7% trading at US$30,206.51 shortly after the market opened.
8:55am: Bitcoin smashes 30K, dominance hits two-year high
Bitcoin broke above US$30,000 for the first time in 10 months this morning, sending short liquidations spiralling to US$50 million and opening the possibility for a move above $31,000 if the bulls remain galvanized.
30K was a key target for Bitcoin longs since the start of 2023, when the benchmark cryptocurrency proved itself as among the best-performing asset classes and a safe-haven play amid widespread turmoil in the traditional markets.
Year to date, BTC/USDT is over 80% higher, with yesterday’s performance alone seeing a 4.6% surge.
Bitcoin-adjacent stocks pulled ahead as well, with Coinbase adding 7.6% in the Monday session, crypto miner Marathon Digital adding 14% and the Grayscale Bitcoin Trust (GBTC) adding 5.7%.
6:30am: Marking time
Wall Street is likely to open higher on Tuesday as investors await an inflation report that will set help determine the Federal Reserve’s next interest rate decision, while the start of earnings season later this week will provide an indication of the health of the banking sector.
Futures for the Dow Jones Industrial Average (DJIA) rose 0.2% in pre-market trading, while those for the broader S&P 500 index gained 0.3%, and contracts for the Nasdaq-100 added 0.4%.
After a volatile session, the main US benchmarks ended largely flat on Monday as investors returned from the Easter long weekend still digesting March’s in-line non-farm payrolls report. The DJIA closed 0.3% up at 33,587, while the Nasdaq Composite slid 4 points to 12,084, and the S&P 500 added 4 points to 4,109.
“It was the first opportunity that investors had to react to the non-farm payrolls figure, which was released on Good Friday,” commented Richard Hunter, head of markets at interactive investor. “The reading of 236,000 was in line with expectations, with a moderate fall in the unemployment rate to 3.5% from a previous 3.6%. There was also a slight decline in wage inflation, all of which left the consensus unchanged that the Federal Reserve would persist with its hiking policy for now and raise rates by 0.25% at the upcoming May meeting.”
Hunter noted that this week promises to uncover further clues with a busy economic and corporate calendar in sight. The Consumer Price Index (CPI), out on Wednesday, is expected to show headline inflation rose 0.2% in March from February’s 0.4% month-over-month gain, and at an annual rate of 5.2% from 6% in February.
“Consumer price and producer price index data will provide fresh updates on the Fed’s battle against inflation, and at the end of the week the first quarter earnings season begins in earnest as three of the larger banks report results,” he added.
“The banks will be an early test of investors’ mettle on any number of fronts, not least of which will be the early fallout from the recent banking turmoil, as JP Morgan Chase, Wells Fargo and Citigroup open the season.
“In particular, loan growth will be scrutinised and could prove to be tepid in view of tightening lending conditions, while there will also be a close eye on any increase in souring loans, given the slowing economy. In turn, this could lead banks to increase provisions for bad debts once more, with the additional pressures of a deal-making drought and trading volatility also potentially weighing on earnings," Hunter concluded.