U.S. stocks rose Tuesday, shaking off a wobble that followed remarks a day earlier by Federal Reserve Chairman Jerome Powell signaling that the central bank could deliver bigger interest rate increases at coming policy meetings in a bid to rein in inflation currently running at a 40 year high.
What’s happening
- The Dow Jones Industrial Average DJIA, +0.82% rose 219 points, or 0.6%, to 34,772.
- The S&P 500 SPX, +0.61% gained 29 points, or 0.7%, to 4,490.
- The Nasdaq Composite COMP, +0.62% was up 114 points, or 0.8%, at 13,952.
Stocks stumbled Monday after Powell said the central bank could deliver hikes of 50 basis points, or half a percentage point, in future meetings, but ended the day well off session lows. The Dow fell 0.6%, snapping a five-day winning streak, while the S&P 500 finished fractionally lower and the Nasdaq Composite slipped 0.4%.
What’s driving markets
Treasury yields surged following Powell’s remarks on Monday and were extending the rise Tuesday. The 10-year Treasury note yield BX:TMUBMUSD10Ywas at 2.366%, up around 4 basis points after rising to its highest since May 2019 on Monday.
There’s more commentary coming from Federal Reserve officials Tuesday, including New York Fed President John Williams.
Meanwhile, Russia intensified air and sea attacks across Ukraine, as President Joe Biden encouraged U.S. companies to harden their cyber defenses against Russia.
Goldman Sachs analysts said markets have rebounded but only commodities and the dollar are above their preinvasion peak.
“With global central banks maintaining their hawkish stance and focus on inflation, the shorter duration, value pockets have led the rebound contributing to last week’s outperformance of European equities,” said London-based Goldman strategists led by Cecilia Mariotti.
Companies in focus
- Okta Inc. OKTA, the authentication company, said it was investigating images purporting to show a hack of their internal system, though the hacking group is believed to be based in Brazil. In a tweet, Okta CEO Todd McKinnon said there was no evidence to date of ongoing malicious activity, Barrons’ reported. Shares fell 6.6%.
- Alibaba Group Holding Ltd. BABA, +9.98% announced late Monday that it was boosting the size of its share-buyback program, with the Chinese e-commerce giant is authorizing repurchases of as much as $25 billion in shares, up from $15 billion. U.S.-listed shares rose 13%.
- Shares of Nike Inc. NKE, +5.89% rose 5.1% after the company reported stronger-than-expected earnings and sales Monday.
Other assets
- The ICE U.S. Dollar Index DXY, -0.08%, a measure of the currency against a basket of six major rivals, was little changed.
- Oil futures rose, with the U.S. benchmark CL.1, -0.27% fell 0.4% to less than $110 a barrel, while gold futures GC00, -0.40% edged down 0.2% to trade below $1,925 an ounce.
- Bitcoin BTCUSD, +3.77% rose 4.5% to trade near $43,000.
- The Stoxx Europe 600 SXXP, +0.73% rose 0.7% and London’s FTSE 100 UKX, +0.50% advanced 0.5%.
- The Shanghai Composite SHCOMP, +0.19% rose 0.2%, while the Hang Seng Index HSI, +3.15% jumped 3.1% in Hong Kong and Japan’s Nikkei 225 NIK, +1.48% gained 1.5%.
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