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Stocks rise as investors weigh the Fedspeak

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US stocks advanced on Tuesday as Wall Street processed tough rate talks from Federal Reserve officials and pondered President Jerome Powell’s remarks at an event hosted by Sweden’s central bank.

The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) were up a modest 0.2% in afternoon trade after rising at the open and then briefly turning negative in an ebb and flow week. The tech-heavy Nasdaq Composite (^IXIC) rose 0.5%.

Powell reiterated the importance of stable inflation in a speech on Tuesday at the Symposium on Central Bank Independence in Stockholm, Sweden, adding that leveling out prices may require the Fed to take necessary, even if often unpopular, action.

“The case for monetary policy independence rests on the benefits of isolating monetary policy decisions from short-term political considerations,” he said.

In another busy Fedspeak week, Federal Reserve Governor Michelle Bowman said on Tuesday that there is still more work to be done in tackling inflation despite recent improvements in data, and said the Fed will continue to raise rates. interest rates to reach its long-term price of 2%. stability goal.

“I am committed to taking further action to bring inflation back to our target,” Bowman said at the Florida Bankers Association Leadership Luncheon in Miami, Florida.

In specific market moves, shares of Coinbase (COIN) rose 4.9% after the cryptocurrency exchange said it would cut nearly 1,000 jobs as part of a restructuring plan. The company expects to incur approximately $149 million to $163 million in restructuring expenses. The move will mark Coinbase’s third round of layoffs since last year.

Shares in Virgin Orbit Holdings (VORB), owned by billionaire Richard Branson, fell 10% after one of the company’s rockets failed to reach its target orbit on a highly anticipated space mission due to a technical failure.

Investors continued to watch shares of retailer Bed Bath & Beyond (BBBY), which reported earnings below estimates, just a week after revealing the company was considering bankruptcy due to its financial difficulties. The meme stock soared nearly 20% on Tuesday after a 24% increase on Monday.

“As we shared last week, we continue to work with advisors as we consider all strategic alternatives to achieve our short- and long-term goals,” CEO Sue Gove said in an update on Tuesday, adding that “various avenues are being explored. ”.

Bumble (BMBL) stock was up 5% in early trading after KeyBanc upgraded the women-founded dating app from Industry Weight to Overweight and said “the competitive environment appears stable and economic pressures are easing.” .

Oak Street Health (OSH) stock soared 28% after Bloomberg News reported on Monday that CVS Health is exploring an acquisition of the primary care center operator.

NEW YORK, NEW YORK - JANUARY 09: Traders work on the floor of the New York Stock Exchange during afternoon trading on January 09, 2023 in New York City.  Equities closed with mixed results after opening higher, with the Dow Jones and S&P 500 closing at losses and the Nasdaq closing with a second day of gains.  (Photo by Michael M. Santiago/Getty Images)

Traders work on the floor of the New York Stock Exchange during afternoon trading on January 09, 2023 in New York City. (Photo by Michael M. Santiago/Getty Images)

Tuesday’s moves come after a mixed start to the week where the tech-heavy Nasdaq extended gains from a Friday rally while the other two major averages failed to sustain momentum. The Nasdaq rose 0.6% on Monday, while the S&P 500 and Dow closed down 0.1% and 0.3%, respectively, after aggressive comments from two Federal Reserve officials.

San Francisco Fed President Mary Daly said during a live interview with the Wall Street Journal that she expects policymakers to raise interest rates to anything above 5%, adding that the final rate will depend on the trajectory of the inflation.

Echoing that view, Atlanta Federal Reserve President Raphael Bostic also said the US central bank should raise interest rates above 5% at the start of the second quarter and then hold them there for a “long time”.

“I’m not a pivot guy,” Bostic said in remarks at the Atlanta Rotary Club on Monday. “I think we should pause and wait, and let politics work.”

Thursday will bring investors the Consumer Price Index (CPI) for December – perhaps the most important economic release of the month and the last significant reading ahead of the January 31-February meeting of Federal Reserve officials. 1 to deliver your next interest rate hike.

Economists expect the CPI to have risen 6.6% year-on-year in December, down from the 7.1% rise seen in November, according to Bloomberg data. On a month-to-month basis, the CPI has likely remained flat.

The report will likely tip bets on whether the Federal Reserve will raise interest rates by 0.25% or 0.50% early next month.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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