NEW YORK, May 4 — Wall Street stocks ended higher on Tuesday after a choppy session in which each of the major indexes fluctuated between gains and losses as a key meeting of the Federal Reserve got under way.
Investors picked up shares of financials and technology companies ahead of Wednesday’s expected announcement by the Fed.
Nine of the 11 major S&P 500 sectors rose, with energy .SPNY and financials .SPSY up 2.9 per cent and 1.3 per cent, respectively. The S&P 500 banks index .SPXBK gained 2 per cent, with Citigroup Inc C.N climbing 2.9 per cent.
The US central bank kicked off its two-day policy meeting on Tuesday. Traders see a 99.9 per cent chance of a 50 basis-point hike on Wednesday, according to CME’s FedWatch Tool, which would mark the largest rate hike by the Fed since May 2000. IRPR
The spotlight stays on Fed Chair Jerome Powell’s news conference on Wednesday for comments on the future path of interest rates and balance-sheet reduction.
“The number one driver of all the market volatility over the last several months has been the Fed and the Fed hawkish rhetoric, so getting an update from them at a Powell press conference (on Wednesday) is a major catalyst and I think the market now is kind of just in waiting mode,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.
In April, Wall Street was hammered by uncertainty around the Fed’s ability to engineer a soft landing for the economy, mixed earnings from some big growth companies, the war in Ukraine and pandemic-related lockdowns in China.
The Nasdaq Composite .IXIC slumped nearly 13.3 per cent last month, its worst monthly performance since October 2008 as richly valued high-growth stocks came under pressure from rising rates.
The Dow Jones Industrial Average .DJI rose 67.29 points, or 0.2 per cent, to 33,128.79, the S&P 500 .SPX gained 20.1 points, or 0.48 per cent, to 4,175.48 and the Nasdaq Composite .IXIC added 27.74 points, or 0.22 per cent, to 12,563.76.
The indexes were boosted by stocks including Apple Inc AAPL.O, Tesla Inc TSLA.O and Exxon Mobil Corp XOM.N, which rose between 0.7 per cent and 2.1 per cent.
Estee Lauder Cos Inc EL.N slumped 5.8 per cent after the cosmetics maker cut its full-year profit forecast due to fresh Covid-19 restrictions in China and the Russia-Ukraine crisis.
Hilton Worldwide Holdings Inc HLT.N slid 4.2 per cent after the hotel operator forecast a bleak full-year profit.
Western Digital Corp WDC.O jumped 14.5 per cent as the largest percentage gainer on the S&P 500 after activist investor Elliott Investment Management urged the company to separate its Flash business and offered to invest US$1 billion to facilitate a sale or a spin-off of the business.
Volume on US exchanges was 11.35 billion shares, compared with the 11.88 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favored advancers.
The S&P 500 posted 2 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 29 new highs and 195 new lows. — Reuters