4:12pm: Tech stocks rally
The Dow closed Tuesday up 57 points, 0.2%, at 34,153, the Nasdaq Composite added 121 points, 0.9%, to 13,640 and the S&P 500 improved 12 points, 0.3%, to 4,378. The small-cap Russell 2000 index lost 3 points, 0.2%, to 1,735.
The Nasdaq and S&P each clinched their longest winning streaks since November 2021, with runs of 8 and 7 sessions, respectively.
Investors responded well to falling Treasury yields. The 10-year Treasury yield last declined about 9 basis points lower to 4.573%.
“As yields move lower, we tend to get a bigger rebound in the growth parts of the market,” said Mona Mahajan, senior investment strategist at Edward Jones, adding that a cooldown in oil prices may also be contributing to sentiment around inflation, and offering some relief at the pump.
Tech stocks improved, with Apple, Microsoft and Amazon shares each gaining more than 1%.
12:00pm: Nasdaq on course for eighth winning day in a row
The Nasdaq sailed higher after a tepid start eyeing an eighth winning day in a row, which would be the longest win streak since November 2021.
At midday, the Dow Jones Industrial Average was up 67.08 points, 0.2%, at 34,162.94, the S&P 500 was up 14.38 points, 0.3%, at 4,380.36 and the Nasdaq was up 127.51 points, 0.9%, at 13,646.29.
The market shrugged off hawkish comments from a Fed official and despite commentators wondering how much steam was left in the current rally.
Fawad Razaqzada at Forex.com said: "Last week’s rally was very impressive and came in the face of a growing list of macro concerns, including high yields, growth concerns and the Middle East situation."
"The recovery has left some investors wondering whether the markets will be able to continue climbing a wall of worry."
"For what it is worth, I think that stocks were due for a bounce after a deep sell-off anyway, and so they may struggle to extend gains from here."
9:40am: Dow lower as Fed official hints ar more rate hikes
US stocks opened lower, pausing for breath afer recent gains, as a Fed offical suggested the Federal Reserve could raise interest rates once more.
Shortly after the opening bell, the Dow Jones Industrial Average was down 54.51 points, 0.2%, at 34,041.35, the S&P 500 was down 8.65 points, 0.2%, at 4,357.33 and the Nasdaq Composite was flat at 13,517.29.
Craig Erlam at Oanda said "with yields now stabilizing again, equities are also running low on energy and may require another boost from the data or central bank."
"But Fed officials remain extremely cautious, fearing stopping too soon and suffering another onslaught of criticism for underestimating the inflationary pressures."
"And we're seeing that again, with Kaskari claiming it's too soon to declare victory and that doing too much is preferable to too little."
Minneapolis Federal Reserve President Neel Kashkari thinks there’s a possibility the central bank could continue raising rates from here.
“Undertightening will not get us back to 2% in a reasonable time,” Kashkari told The Wall Street Journal.
Erlam thinks policymakers can't afford to bounce between messaging depending purely on how bond yields are performing, especially when they are largely responsible for the moves, but they are clearly paying close attention to them.
7:00am: Stocks futures point lower after stellar run
Stock futures were lower in pre-market trading as a recent rally on Wall Street looked poised for a pause.
In pre-market trading, futures for the Dow Jones Industrial Average were down 0.3%, while those for the S&P 500 were 0.3% lower, and contracts for the Nasdaq 100 futures fell 0.3%.
Joshua Mahony at Scope Markets said: “We are starting to see crack appear in the bullish theme that dominated last week, with US markets pointing towards a likely pullback as they follow their European counterparts lower.”
“Just as the RBA has signalled concerns over the length of time it could take to bring inflation down to target, the optimism over an end to Fed tightening will likely be tempered by the reality over how long this normalization of price pressures could take.”
“While recent central bank meetings have helped lift spirits as we potentially leave the tightening phase behind us, this may not necessarily justify an all-out return to optimism quite yet.”
On Monday, equities made steady progress with the Nasdaq taking its winning run to seven days.
Minneapolis Federal Reserve President Neel Kashkari thinks there’s a possibility the central bank could continue raising rates from here.
“Undertightening will not get us back to 2% in a reasonable time,” Kashkari told The Wall Street Journal.
Kashkari noted that he is “not ready to say we are in a good place.”
Elsewhere, earnings from Uber, KKR, Carlyle Group, DR Horton and Squarespace are due before Wall Street opens.
Ebay, Fidelity, Robinhood, Rivian and Cava will report after the market closes.