Summary: Fed speakers maintain focus on inflation Uber gains after Q3 results Datadog jumps on annual forecast raise Indexes up: Dow 0.13%, S&P 0.31%, Nasdaq 0.99% Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 27, 2023. REUTERS/Brendan McDermid/File photo
U.S. stocks rose on Tuesday, with the S&P 500 and Nasdaq on track for their longest streak of gains in two years, as a retreat in U.S. Treasury yields buoyed megacap growth stocks and investors sought more clarity on interest rates from the Federal Reserve.
The benchmark 10-year Treasury note yield was on pace for its fifth decline in six sessions on expectations the Fed is done with its rate hike cycle. Yields extended losses after a solid auction of $48 billion in 3-year notes with auctions of the 10-year note and 30-year bond due later this week.
Expectations that the Fed’s rate hike cycle is at an end have increased in recent days, but the market remains sensitive to the possibility of more hikes, and central bank officials have been cautious in comments on the future rate path.
Fed Governor Christopher Waller said on Tuesday that third-quarter U.S. economic growth, at an annualized 4.9% rate, was a “blowout” performance that warrants watching as the central bank considers its next policy moves. Fellow Governor Michelle Bowman said she took the recent Gross Domestic Product number as evidence the economy not only “remained strong,” but might have gained speed and requires a higher Fed policy rate.
Both Federal Reserve Bank of Minneapolis President Neel Kashkari and Chicago Fed President Austan Goolsbee also refused to rule out rate cuts.
Fed Chair Jerome Powell is set to speak on Wednesday and Thursday.
“That is the story today, that the Fed is done, but yesterday it was maybe not. Powell is going to speak on Thursday so that is going to leave the door open,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.
“But what the market is telling you – the market, traders – are pushing for is we’re all done, it’s a rate cut, almost as if they are trying to force the hand.”
The pullback in yields helped lift megacap growth names such as Microsoft (MSFT.O), up 1.5%, and Apple (AAPL.O), up 1.7%, as the biggest boosts to both the S&P 500 and Nasdaq.
The Dow Jones Industrial Average (.DJI) rose 45.28 points, or 0.13%, to 34,141.14, the S&P 500 (.SPX) gained 13.11 points, or 0.31 %, at 4,379.94 and the Nasdaq Composite (.IXIC) gained 135.13 points, or 0.99 %, at 13,652.76.
Energy (.SPNY), the worst performing sector, fell 2.4% as crude prices settled down more than 4% on demand concerns and a firmer dollar.
Also due to speak on Tuesday was New York Fed President John Williams.
The S&P 500 (.SPX) is on pace for its seventh straight day in the green, with the Nasdaq (.IXIC) on track to rise for the eighth day in a row, the longest such streak for each index in two years. The Dow is up for a seventh straight session, its longest since a 13-session run in July.
Uber Technologies(UBER.N) rose 3% as the ride-hailing firm projected fourth-quarter adjusted core profit above estimates.
Datadog(DDOG.O) surged 28.2% after raising its forecast for annual adjusted profit and revenue.
Declining issues outnumbered advancers by a 1.3-to-1 ratio on the NYSE while on the Nasdaq, advancing issues outnumbered decliners by a 1-to-1 ratio on the Nasdaq.
The S&P 500 posted 13 new 52-week highs and three new lows while the Nasdaq recorded 43 new highs and 132 new lows.
Reporting by Amruta Khandekar and Shristi Achar A in Bengaluru; Editing by Maju Samuel and Richard Chang
