US stocks moved higher on Tuesday as investors welcomed a pullback in surging oil prices, putting focus back on the ongoing debate over the economy and interest rates.
The benchmark S&P 500 (^GSPC) stepped up around 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) rose around 1.2% as tech megacaps recouped the previous session’s losses. The Dow Jones Industrial Average (^DJI) edged up roughly 0.2%.
Stocks are set to pick up on the winning trend of recent months as Monday’s headwinds ease, with oil prices retreating as Mideast tensions cool somewhat.
Some “Magnificent Seven” stocks regained ground lost amid negative headlines, with Amazon (AMZN), Apple (AAPL), and Alphabet (GOOG, GOOGL) all nudging higher. Meanwhile, Nvidia (NVDA) built on a closing gain, rising another 4% on Tuesday, as the chip heavyweight’s partner Hon Hai pointed to “crazy” AI demand.
But the market is still grappling with busted hopes for jumbo interest rate cuts while lingering recession worries got a boost as China failed to deliver an expected big stimulus on Tuesday. Stocks in Hong Kong (^HSI) slumped over 9%, as a roaring stimulus-fueled rally in Chinese stocks fizzled out.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
On that theme, Federal Reserve policy is “well positioned” to nail a “soft landing” for the economy, New York Fed president John Williams told the Financial Times. Meanwhile, Fed governor Adriana Kugler said data will continue to drive rate decisions.
Those comments sharpened investors’ focus on the CPI inflation report due Thursday, which will provide further clues on the path forward for interest rates.
In corporates, PepsiCo (PEP) got the ball rolling on earnings season, posting a surprise drop in quarterly revenue and lowering its forecast for 2024 sales growth. Shares of the snack and drinks giant ticked up slightly in afternoon trading.
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