The Dow Jones Industrial Average climbed 103.60 points, or 0.3 per cent, to 34,108.64, the S&P 500 added 0.73 per cent to 4,019.65 and the Nasdaq Composite rose 1.01 per cent to 11,256.81
Stocks rose Tuesday after the release of new U.S. inflation data, while traders awaited a key Federal Reserve policy decision.
The Dow Jones Industrial Average climbed 103.60 points, or 0.3 per cent, to 34,108.64. The S&P 500 added 0.73 per cent to 4,019.65. The Nasdaq Composite rose 1.01 per cent to 11,256.81.
Earlier in the session, the Dow was up as much as 707.24 points, or 2.08 per cent. The S&P 500 advanced 2.77 per cent, while the Nasdaq gained 3.84 per cent.
Stocks initially rallied after the consumer price index showed an increase of just 0.1 per cent from the previous month, and a gain of 7.1 per cent from a year ago, the Labor Department reported Tuesday. Economists surveyed by Dow Jones had been expecting a 0.3 per cent monthly increase and a 7.3 per cent rise over the past 12 months. Excluding volatile food and energy prices, so-called core CPI rose 0.2 per cent on the month and 6 per cent on an annual basis, compared to respective estimates of 0.3 per cent and 6.1 per cent.
However, major indexes came off their best levels as the day continued.
Investors are anticipating the Federal Reserve’s next rate-hiking decision at the conclusion of its two-day policy meeting on Wednesday. Traders are largely pricing in a 50-basis point increase, a slight decline from the previous four hikes.
While the inputs of inflation coming into that Fed meeting are modestly better, we still don’t know for sure if the Fed’s going to raise by 50 basis points, if they’re going to raise their terminal rate. So, we have quickly shifted gears into a mode of ‘wait and see’ for the Fed meeting tomorrow, said Art Hogan, chief market strategist at B. Riley Wealth.
The 10-year Treasury yield slipped after the CPI report and touched a low of 3.421%.