S & P 500 rises slightly in volatile trading prior to Fed decision

US stocks rose slightly on Tuesday as investors were looking forward to an important Federal Reserve meeting.

S & P 500 rose 0.7%. The Dow Jones Industrial Average rose 128 points (0.4%) and the Nasdaq Composite Index rose 0.4%.

Tuesday’s action followed a late rally from the previous session. It saw all three major averages wipe out the fairly high losses of the day.

“For the first time in a few days, the seller is exhausted and shorts are a little more tense than longs (few people feel” bottomed “, but even bears are worried about a sudden rebound rally. ”)” Adam Crisafulli of Vital Knowledge said in a note to the client.

These moves are ahead of the widely-anticipated Federal Reserve decision on Wednesday.

Wall Street is very much looking forward to the central bank raising interest rates by 50 basis points this week, but some investors have already been priced in the market for aggressive monetary tightening expectations from the central bank. I believe there is.

Paul Tudor Jones, Billionaire Hedge Fund Manager, said on CNBC’s “Squawk Box“On Tuesday, the Fed’s tightening and economic slowdown should make capital protection a major investor goal.

“You can’t think Worse environment Than where we currently deal with financial assets. Obviously, I don’t want to own bonds or stocks. “

Benchmark 10-year Treasury yields also rose to a new milestone on Monday.Bond yield 3.01% hit during the session, The highest score since December 2018. However, it may have receded on Tuesday and the selling pressure on stocks has eased.

Tuesday’s rise was broad at the S & P 500, but was led by the energy sector. ExxonMobil and EOG resources each rose by more than 2%. Defense sectors such as healthcare and utilities also outperformed, with Pfizer up 2.8% after reporting a better-than-expected first quarter.

The stock is off the brutal stretch of a few weeks. April was the worst month since March 2020 for the Dow and S & P500. It was the worst month for Nasdaq since 2008.

“Although some gauges have room for further movement / downside in the short term, data continue to portray extreme fear and contrarian opportunities for long-term investors,” said RBC strategist Lori Calvasina. I think it is. ” A note to the client.

According to LPL Financial, the S & P 500 is trading in a correction area, down about 13% from its all-time high, but the size and length of this drawdown is consistent with past corrections.

The expected rate hike comes from growing concerns about the global economy, partly due to the blockade of China and the effects of the war in Europe.

“The market remains hostage to China Covid-19’s response and geopolitics,” JP Morgan strategist Missraf Matezika said in a note to customers.

Tuesday’s corporate earnings report spurred the movement of individual stocks.

Despite better than expected textbook companies, Chegg’s share price fell nearly 30% after issuing weak guidance throughout the year. Expedia and Hilton fell 13% and 4%, respectively, after the quarterly report.

On the plus side, Clorox shares rose more than 4% after the company’s third-quarter performance exceeded expectations.

In terms of data, there were some positive signs of the economy. Factory orders in March increased 2.2%, exceeding expectations. The number of job offers was a record high of 11.5 million.

S & P 500 rises slightly in volatile trading prior to Fed decision

Source link S & P 500 rises slightly in volatile trading prior to Fed decision

Back to top button