Wall Street stocks nudged higher on Tuesday amid growing hopes the Federal Reserve is done with interest-rate hikes for now, but with investors still cautious as the Middle East conflict escalated.
The Dow Jones Industrial Average (^DJI) was up almost 0.3%, while the S&P 500 (^GSPC) gained about 0.2%. The tech-heavy Nasdaq Composite (^IXIC) also added roughly 0.2%, after the stock indexes reversed losses to close higher on Monday.
The gains came after dovish comments from two Fed officials, who signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for. That could give policymakers a reason to call an end to raising rates in this cycle, some analysts believe.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
But the IMF has warned that monetary policy needs to remain tight in most places, as central banks are “not quite there” on bringing tenacious inflation down toward targets.
Easing some pressure on stocks, yields on Treasuries dropped as trading reopened on Tuesday after closing for a holiday. The 10-year Treasury (^TNX) yield came off its 16-year peak even as investors kept watch on the clashes between Islamist militant group Hamas and Israel, which has vowed to put the Gaza strip under siege.
In another sign of easing worries, oil prices fell after gaining more than 4% as investors eyed potential supply disruptions from the Middle East conflict.
In individual stocks, PepsiCo (PEP) shares rose 1.4% after the maker of Pepsi soda and Frito Lay snacks hammered Wall Street estimates for third-quarter profit and raised its annual earnings forecast.
Eyes will be on the several Fed officials on deck to speak on Tuesday, including Raphael Bostic, Neel Kashkari, Christopher Wallerand Mary Daly.
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AStocks edge slightly higher, yields fall
US stocks opened modestly higher on Tuesday with the the Dow Jones Industrial Average (^DJI) rising 0.3% while the S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) rose about 0.2% and 0.1%, respectively. Treasury yields, meanwhile, dropped by the most since March with the note on the 10-year falling 11 basis points to trade near 4.68%
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PepsiCo, Arm, Rivian: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Tuesday:
PepsiCo (PEP): Shares rose 1% premarket. The company beat Wall Street estimates in its third-quarter earnings release on Tuesday.
Arm (ARM): The chipmaker’s shares rose by almost 2% premarket on Tuesday. Analysts from Guggenheim, Citi, and JPMorgan initiated coverage on semiconductor company, each giving the stock a bullish rating.
Rivian (RIVN): Rivian shares were up over 2% after a UBS upgrade. However, Wedbush cut its price target for EV maker to $25 from $32.
Unity Software (U): Shares rose 4%. The group named technology veteran James Whitehurst as interim CEO on Tuesday, replacing John Riccitiello, who is retiring.
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KStock futures inch up as hopes for Fed pause rise
The major stock indexes were poised to open in the green on Tuesday as investors focused on dovish comments from Federal Reserve officials, but kept one eye on developments in the Middle East conflict.
Futures on the Dow Jones Industrial Average (^DJI) added 0.17%, or 58 points, while S&P 500 (^GSPC) futures rose 0.11%. Contracts on the tech-heavy Nasdaq 100 were up 0.12%.
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