Stocks moved mostly higher over the course of the trading day on Tuesday, adding to the modest gains posted in the previous session. The major averages all moved to the upside, further offsetting the pullback seen last week.
The major averages reached new highs for the session going into the close. The Dow jumped 317.02 points or 0.9 percent to 34,261.42, the Nasdaq rose 75.22 points or 0.6 percent to 13,760.70 and the S&P 500 climbed 29.73 points or 0.7 percent to 4,439.26.
The strength on Wall Street came as traders looked ahead to release of the Labor Department’s closely watched report on consumer price inflation on Wednesday.
Consumer prices are expected to increase by 0.3 percent in June after inching up by 0.1 percent in May, while core consumer prices, which exclude food and energy prices, are expected to rise by 0.3 percent in June after climbing by 0.4 percent in May.
The annual rate of growth by consumer prices is expected to slow to 3.1 percent June from 4.0 percent in May and the annual rate of core consumer price growth is expected to slip to 5.0 percent in June from 5.3 percent in May.
The consumer price data is likely to have a significant impact on the outlook for interest rates ahead of the next Federal Reserve meeting later this month.
Ahead of the inflation data, CME Group’s FedWatch Tool is indicating a 92.4 percent chance of another quarter point rate hike at the next Fed meeting later this month.
“U.S.” stocks rose as bond yields remained capped as Wall Street looks like it is ready to move beyond a pivotal inflation report that should suggest interest rates will stay higher for longer,” said Edward Moya, senior market analyst at OANDA.
He added, “Headline CPI might fall to 2.9% and core could see the lowest reading since 2021, but sticky inflation signs will likely remain. “
Sector News
Energy stocks saw substantial strength on the day, benefiting from a sharp increase by the price of crude oil.
With crude for August delivery surging $1.84 to $74.83 a barrel, the Philadelphia Oil Service Index spiked by 3.2 percent and the NYSE Arca Oil Index jumped by 2.2 percent.
Significant strength was also visible among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index both climbing by 1.7 percent.
Tobacco, steel and natural gas stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. While Japan’s Nikkei 225 Index closed just above the unchanged line, China’s Shanghai Composite Index rose by 0.6 percent and Hong Kong’s Hang Seng Index jumped by 1.0 percent.
The major European markets also moved to the upside on the day. While the French CAC 40 Index jumped by 1.1 percent, the German DAX Index advanced by 0.8 percent and the U.K.’s FTSE 100 Index inched up by 0.1 percent.
In the bond market, treasuries extended the upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.6 basis points to 3.980 percent.
Looking Ahead
Trading on Wednesday is likely to be driven by reaction to the report on consumer price inflation and its impact on the outlook for interest rates.
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