Shares rose before another session on Tuesday, as investors assessed sliding interest rates and new data for further clues about the health of the US economy. Wall Street also waited for gains from major tech companies.
The Dow Jones Industrial Average was up 258 points, or 0.8%, after briefly rising more than 300 points. The S&P 500 was up 1.3% and the Nasdaq Composite was up 1.9%.
Tuesday’s moves added to the sharp rallies of the previous two sessions. On Monday, the Dow and S&P 500 each gained more than 1%, while the Nasdaq rose 0.9%. On Friday, the Dow rose more than 700 points.
A decline in revenue contributed to the latest profit. Ten-year government bond benchmark yields last fell about 14 basis points to 4.094%. Two-year government bond yields last fell about 4 basis points to 4.458%.
Taken together, returns and large index movements are signs that investors are “doubling expectations of an easier Fed,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.
Hodge said economic data released Tuesday is also a point of hope for investors seeking a Federal Reserve change course on rate hikes as the central bank tries to curb inflation.
The S&P CoreLogic Case-Shiller 20-City House Price Index released Tuesday showed house prices fell 1.3% in August in the 20 core cities studied month-over-month, but still 13.1% were higher than a year ago. The Consumer Confidence Index also fell, showing that the outlook on the economy has soured after two months of improving prospects.
“The market is just starting to get some indication that economic data is likely to slow,” Hodge said. “The knock-on effects from there might give the Fed a little more breathing room.”
In addition, traders delved into a few company reports. General Motors and UPS were up 4.3% and 1.3% respectively on better-than-expected gains. Coca-Cola also reported stronger-than-projected gains, pushing the stock up more than 1%.
So far this season, companies have proven that they may be doing better than expected. Data from FactSet shows that through Tuesday morning, 71% of companies reporting exceeded analyst expectations for earnings per share.
Meta Platforms reports Wednesday, followed by Amazon and Apple on Thursday. Given their massive size and market cap, any moves are likely to boost the market going forward.