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U.S. stocks ended higher on Tuesday as Treasury yields fell and dovish comments from Fed officials raised optimism among investors that the central bank may be done with its monetary tightening campaign. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.4% or 134.65 points to close at 33,739.30 points.
The S&P 500 rose 0.5% or 22.58 points, to end at 4,358.24 points. Utilities, consumer discretionary and consumer staples stocks were the biggest gainers.
The Utilities Select Sector SPDR (XLU) gained 1.4%, while the Consumer Discretionary Select Sector SPDR (XLI) rose 1.1%. The Consumer Staples Select Sector SPDR (XLP) rose 1%. All the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 0.6% or 78.60 points to finish at 13,562.84 points.
The fear-gauge CBOE Volatility Index (VIX) was down 3.79% to 17.03. A total of 9.91 billion shares were traded on Tuesday, lower than the last 20-session average of 10.70 billion. Advancers outnumbered decliners on the NYSE by a 3.08-to-1 ratio. On the Nasdaq, a 2.12-to-1 ratio favored advancing issues.
Treasury Yields Fall, Rate Hikes Fears Wane
Stocks rallied for the third straight session on Tuesday as investors brushed off the recent worries arising from the ongoing violence in the Middle East and digested fresh comments from Federal Reserve officials.
Dovish comments from Fed officials suggested that the recent tightening of credit conditions might make the central bank decide not to go for another interest rate hike. Raphael Bostic, president of the Atlanta Fed, said that he doesn’t feel more interest rate hikes are at all required.
On Tuesday, Neel Kashkari, Minneapolis Federal Reserve President, said that the recent spike in Treasury yields is quite confusing. The comments from the Fed officials over the past two days eco the sentiments of Fed Vice Chair Philip Jefferson, who said on Monday that following the recent jump in long-term Treasury yields, the Fed could proceed carefully.
The dovish outlook from the Fed officials gave investors’ confidence a boost as optimism is high that the Fed might not raise interest rates in its November FOMC meeting. Investors on Tuesday were pricing an 86% chance that the central bank will keep its federal policy rate unchanged in its November meeting.
Also, the benchmark the 10-year Treasury yield, which did not trade on Monday due to Columbus Day, fell 13 basis points on Tuesday to settle at 4.654% as investors went for safe assets amid the ongoing Hamas-Israel conflict.
In economic data released on Tuesday, wholesale inventories fell 0.1% in August, recording the sixth straight month of decline. However, it came in line with economists’ expectations.
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Stock Market News for Oct 11, 2023
U.S. stocks ended higher on Tuesday as Treasury yields fell and dovish comments from Fed officials raised optimism among investors that the central bank may be done with its monetary tightening campaign. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.4% or 134.65 points to close at 33,739.30 points.
The S&P 500 rose 0.5% or 22.58 points, to end at 4,358.24 points. Utilities, consumer discretionary and consumer staples stocks were the biggest gainers.
The Utilities Select Sector SPDR (XLU) gained 1.4%, while the Consumer Discretionary Select Sector SPDR (XLI) rose 1.1%. The Consumer Staples Select Sector SPDR (XLP) rose 1%. All the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 0.6% or 78.60 points to finish at 13,562.84 points.
The fear-gauge CBOE Volatility Index (VIX) was down 3.79% to 17.03. A total of 9.91 billion shares were traded on Tuesday, lower than the last 20-session average of 10.70 billion. Advancers outnumbered decliners on the NYSE by a 3.08-to-1 ratio. On the Nasdaq, a 2.12-to-1 ratio favored advancing issues.
Treasury Yields Fall, Rate Hikes Fears Wane
Stocks rallied for the third straight session on Tuesday as investors brushed off the recent worries arising from the ongoing violence in the Middle East and digested fresh comments from Federal Reserve officials.
Dovish comments from Fed officials suggested that the recent tightening of credit conditions might make the central bank decide not to go for another interest rate hike. Raphael Bostic, president of the Atlanta Fed, said that he doesn’t feel more interest rate hikes are at all required.
On Tuesday, Neel Kashkari, Minneapolis Federal Reserve President, said that the recent spike in Treasury yields is quite confusing. The comments from the Fed officials over the past two days eco the sentiments of Fed Vice Chair Philip Jefferson, who said on Monday that following the recent jump in long-term Treasury yields, the Fed could proceed carefully.
The dovish outlook from the Fed officials gave investors’ confidence a boost as optimism is high that the Fed might not raise interest rates in its November FOMC meeting. Investors on Tuesday were pricing an 86% chance that the central bank will keep its federal policy rate unchanged in its November meeting.
Also, the benchmark the 10-year Treasury yield, which did not trade on Monday due to Columbus Day, fell 13 basis points on Tuesday to settle at 4.654% as investors went for safe assets amid the ongoing Hamas-Israel conflict.
Energy prices eased on Tuesday but several prominent names continued to register gains. Shares of Enphase Energy, Inc. ((ENPH - Free Report) ) jumped 5%. Also, industrial stocks gained. Shares of Caterpillar Inc. ((CAT - Free Report) ) rose 0.7%, while Deere & Company ((DE - Free Report) ) jumped 2.1%. Caterpillar carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
In economic data released on Tuesday, wholesale inventories fell 0.1% in August, recording the sixth straight month of decline. However, it came in line with economists’ expectations.