Following the lackluster performance seen on Monday, stocks saw considerable volatility over the course of the trading session on Tuesday. The major averages fluctuated as the day progressed, with the Nasdaq (NASDAQI:COMP) and the S&P 500 (SPI:SP500) eventually closing in positive territory.
While the Nasdaq rose 52.68 points or 0.3 percent to 16,306.64 and the S&P 500 inched up 7.52 points or 0.1 percent to 5,209.91, the narrower Dow (DOWI:DJI) ended the day slightly lower, edging down 9.13 points or less than a tenth of a percent to 38,883.67.
The volatility on Wall Street came as traders continued to look ahead to the release of the Labor Department’s report on consumer price inflation on Wednesday.
Economists currently expect consumer prices to rise by 0.3 percent in March following a 0.4 percent increase in February.
Core consumer prices, which exclude food and energy prices, are also expected to climb by 0.3 percent in March after rising by 0.4 percent in February.
The annual rate of consumer price growth is expected to accelerate to 3.4 percent in March from 3.2 percent in February, while the annual rate of core consumer price growth is expected to slow to 3.7 percent for 3.8 percent.
The inflation data could have a significant impact on the outlook for interest rates, as Federal Reserve officials have repeatedly said they need greater confidence inflation is slowing before cutting rates.
Wednesday will also see the release of the minutes of the Fed’s latest monetary policy meeting, which could also shed additional light on officials’ thinking on rates.
“The central bank wants to see sustained evidence of inflation coming down and that doesn’t appear to be on the menu,” said Dan Coatsworth, investment analyst at AJ Bell.
“The signs are clear for investors to see, but many have been choosing to ignore them,” he added. “The Fed putting it into black and white could be a difficult pill for investors to swallow, so brace yourself for turbulence on the market this week.”
Sector News
Gold stocks showed a significant rebound following the pullback seen on Monday, driving the NYSE Arca Gold Bugs Index up by 1.9 percent to a nearly eleven-month closing high.
The strength among gold stocks came amid an increase by the price of the precious metal, which climbed to a new record high.
Considerable strength also emerged among biotechnology stocks, as reflected by the 1.6 percent gain posted by the NYSE Arca Biotechnology Index.
Networking, commercial real estate and telecom stocks also showed notable moves to the upside, while energy stocks saw some weakness amid a steep drop by the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 1.1 percent, while South Korea’s Kospi fell by 0.5 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index tumbled by 1.3 percent, the French CAC 40 Index slumped by 0.9 percent and the U.K.’s FTSE 100 Index edged down by 0.1 percent.
In the bond market, treasuries regained ground after moving notably lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.6 basis points at 4.368 percent.
Looking Ahead
Early trading on Wednesday is likely to be driven by reaction to the consumer price inflation data, while the Fed minutes may attract attention later in the day.
Source: RTTNEWS