Written by Lisa Pauline Matakkal and Pranav Kashyap
(Reuters) – Wall Street's major indexes were lower on Tuesday as investors' attention turned to the upcoming third-quarter earnings season and inflation data that could provide clues about the Federal Reserve's rate-cutting trajectory. rose.
All three major indexes fell about 1%, weighed down by Monday's sharp selloff, a spike in U.S. Treasury yields, escalating tensions in the Middle East and a reassessment of U.S. interest rate expectations, but the indexes have rebounded somewhat.
On Tuesday, the Dow Jones Industrial Average rose 64.71 points, or 0.16%, to 42,019.35, the S&P 500 rose 45.52 points, or 0.80%, to 5,741.49, and the Nasdaq Composite Index rose 225.48 points, or 1.26%, to 18,149.38. It became.
Most sectors in the S&P 500 rose, with the information technology index leading the way with a 1.8% rise.
The index tracking energy stocks lagged, falling 2.8%, its worst day since April 30, as oil prices fell following Monday's rise. [O/R]
The two-year Treasury yield has fallen slightly from Monday's high, but the benchmark 10-year Treasury yield remains above 4% as last week's strong economic data discouraged investors from expecting a rate cut. Maintained. [US/]
According to CME FedWatch, traders are pricing in a nearly 89% chance that the Fed will cut rates by 25 basis points at its November meeting, although they previously thought a 50 basis point cut was more likely.
The market is currently awaiting the Consumer Price Index statistics to be released this Thursday for further clues on the direction of interest rates.
“The Fed continues to say it's all about the data, so this weekend is important to see if inflation is really under control,” said Kim Forrest, chief investment officer at Bork Capital Partners. Ta.
“But the Fed has indicated when and where interest rates are going and has signaled that they will be lowered.”
The third quarter results are also attracting attention, with major banks scheduled to report this Friday. LSEG estimates that the S&P 500's expected earnings growth rate is 5%.
PepsiCo reversed premarket losses and rose 1.2% after the snack maker cut its annual sales growth forecast, but reported adjusted earnings per share that beat expectations.
The materials sector fell 0.5% to a two-week low as optimism over China's economic stimulus waned and metal prices fell.
U.S.-listed stocks of Chinese companies also fell, following the decline in domestic stocks. Share prices of Alibaba Group, Jingdong Market and PDD Holdings fell by 5.9% to 6.3%.
Roblox fell 3.3% after Hindenburg Research disclosed a short position in the gaming platform on Tuesday.
Federal Reserve President Adriana Kugler said early Tuesday that she supports further rate cuts if inflation continues to ease as she expects.
Other Fed officials, including Rafael Bostic, Susan Collins and Philip Jefferson, are also expected to comment later in the day.
Advancing issues outnumbered declining issues on the New York Stock Exchange by a ratio of 1.05 to 1 and on the Nasdaq by a ratio of 1.09 to 1.
The S&P 500 Index posted 25 new 52-week highs and three new lows, while the Nasdaq Composite Index posted 53 new highs and 84 new lows.
(Reporting by Lisa Matakkal and Pranav Kashyap in Bengaluru; Editing by Shinjini Ganguly)
