4:05pm: Stocks higher at the close
The Dow Jones led the day's gains to close up 0.9%, or more than 315 points. The S&P 500 gained 0.7%, while the tech-heavy Nasdaq Composite added 0.6%.
12:05pm: Investors cautious before tomorrow’s key inflation reading
US stocks were higher in noon trading as investors were cautious ahead of Wednesday’s consumer price index (CPI) report.
At midday, the Dow gained 221 points to 34,165, while the S&P 500 added 20 points at 4,430 and the tech-heavy Nasdaq rose 52 points to 13,738.
“I think [on Wednesday] you’re going to see further evidence that the CPI-measured inflation is continuing its descent …but that’s not good enough for the Fed,” Northwestern Mutual Wealth Management Company chief investment officer Brent Schutte said.
“I think there’s going to be a recession, because the Fed [will] keep going until they see the labor market crack and until wage [growth] goes well below 4%,” he added.
Notable movers included shares of Shutterstock Inc, which climbed 9% after the photography platform announced an expansion of its partnership with OpenAI.
9:40am: Optimism at the open
The three major US indexes moved higher at the open on Tuesday with traders proceeding with optimism ahead of this week’s key consumer and producer price index readings and the kick-off of second quarter earnings season.
Just after the market opened, the Dow Jones had added 155 points or 0.5% at 34,100 points, the S&P 500 was up 9 points or 0.2% at 4,419 points, and the Nasdaq was up 10 points or 0.1% at 13,695 points.
“Hopes have risen that we are approaching the end of the current monetary policy tightening cycle after several members of the Fed suggested interest rates are approaching their peak,” noted FOREX.com market analyst Joshua Warner.
“The president of the San Francisco Fed, Mary Daly, said she sees a ‘couple more rate hikes’ this year in order to bring inflation down to that 2% target while vice chair for supervision Michael Barr said he believes ‘we’re close’ to the end of this hiking cycle.”
7:50am: Inflation data eyed
US stocks are expected to push higher at the open on Tuesday after gains in the previous session snapped a three-session losing streak, with investors eyeing key US inflation data due later this week and the start of the Q2 corporate earnings season.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) added 0.2%, while those for the S&P 500 and the Nasdaq-100 also both rose 0.2%.
On Monday, the DJIA gained 209.52 points, or 0.6% to close at 33,944, while the S&P 500 and the Nasdaq Composite both added 0.2%.
The June consumer price index report will be released on Wednesday, and the June producer price index is due out on Thursday, with the decline in inflation expected to have continued which should give indications to the future direction of US interest rates.
Investors have penciled in another quarter-point increase at the Federal Reserve’s July 25-26 meeting, but are undecided about what the central bank will do at its September meeting after last week’s continued robust jobs data raised concern that policymakers will revert to raising rates following the June pause.
Joshua Mahony, chief market analyst at Scope Markets commented: "Wall Street futures are pointing towards a flat open with many clearly content to sit on the sidelines ahead of those key US inflation readings which are due for publication tomorrow. The prints here are likely to prove instrumental in shaping the market’s view of where the Fed goes next – critically a 25 basis point hike is now close on fully priced in for the meeting at the end of July, but we’re seeing an increasingly hawkish mindset emerge for the latter part of the summer, too."
He added: "Even once the inflation prints are published, attention will quickly swing to earnings news, with reporting season now just a couple of days away. Investors will be keen to see if consumer appetite for discretionary spending is now starting to wane as living costs and the end of the post-COVID bounce back converge."
The second-quarter earnings season kicks off later this week with results from financial institutions such as JPMorgan Chase, Wells Fargo and Citigroup, plus BlackRock, PepsiCo, Delta Air, and UnitedHealth.
On the economic front on Tuesday, June’s NFIB index of small business optimism rose to 91.0 from 89.4, above the consensus forecast of 89.9, indicating that credit conditions for US small businesses are holding up, for now.