CNBC – UPDATED TUE, JUN 13 20236:27 PM EDT
Stocks rose Tuesday after new inflation data showed price pressures slowed again in May, adding to investor optimism that the Federal Reserve could skip a rate hike when it next decides on policy this week.
The Dow Jones Industrial Average traded 145.79 points higher, or 0.43%, to close at 34,212.12. The S&P 500 added 0.69% to close at 4,369.01, and the Nasdaq Composite advanced 0.83% to 13,573.32.
The S&P 500 and the Nasdaq notched fresh 13-month highs during Tuesday’s session. Both indexes each reached their highest closing levels since April 2022 on Monday. Currently, the broad-market index is up about 25% from its October low, surpassing the simplistic definition of a bull market.
May’s consumer price index increased 4% year over year, marking the slowest annual rate since March 2021. Following the report, traders increased their bets that the Fed will keep rates unchanged on Wednesday after hiking at 10 consecutive meetings. The latest odds gave a roughly 91% chance the central bank would keep rates at the current target rate of 5% to 5.25%, according to CME Group’s FedWatch tool.
″[The Fed] will buy themselves the maximum amount of optionality by signaling at least one further hike by the end of 2023, aligned with market expectations, and will guide towards a ‘skip’ instead of an extended pause to sit and observe the effects of raising rates 5% since the beginning of the hiking cycle,” said Gargi Chaudhuri, head of iShares investment strategy, Americas, at BlackRock.
Tech shares led the way as easing inflation and rates boosted optimism for the sector. Oracle shares jumped 0.2% a day after the software vendor topped Wall Street’s estimates for the fiscal fourth quarter. Shares of streaming giant Netflix climbed 2.8%.
Correction: An earlier version of the story had an incorrect headline on the inflation level low. It is the lowest inflation since early 2021.
Stocks close higher ahead of Federal Reserve policy meeting
Stocks closed higher on Tuesday after traders spent the session adding to optimism that the latest inflation data could support the central bank skipping a rate hike for June.
The Dow Jones Industrial Average added 146 points , or 0.4%, to close at 34,212.12. The S&P 500 gained 0.7% to close at 4,369.01, and the Nasdaq Composite advanced 0.8% to 13,573.32.
The consumer price index showed inflation increased 0.1% in May, down from 0.4% a month earlier, and gained 4% year over year. The Fed will decide its next move on policy Wednesday.
Nvidia may have ‘too little upside left,’ ‘Dean of Valuation’ says
It may be hard to find more room to rally for Nvidia, said Aswath Damodaran, a New York University business professor also known as the “dean of valuation.”
The stock has surged more than 180% this year amid excitement around artificial intelligence. But he said it’s hard to see room for shares to get more expensive after trading around $400.
“I’ve held Nvidia now for five years and I’m happy that I did,” Damodaran said on CNBC’s “Closing Bell.” But at the current price, “Nvidia would basically have to decimate or dominate the entire AI market for it to be justifying this price. And I’m not willing to take that bet. I mean, there’s too little upside left when you price that in.”
Oracle’s post-earnings pop fades
Shares of Oracle turned negative in afternoon trading, giving back all of the gains that followed a Monday evening earnings report that beat estimates on the top and bottom lines.
The stock opened trading on Tuesday up nearly 6% and set a new all-time high during the session.
Source: https://www.cnbc.com/2023/06/12/stock-market-today-live-updates.html
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