Wall Street closed higher, and Powell avoided pricing policy

NEW YORK (Reuters) – U.S. stocks closed solidly higher on Tuesday, helped by a 1% gain on the Nasdaq, amid relief from Federal Reserve Chairman Jerome Powell’s refrain in a speech from commenting on interest rate policy.

In his first public appearance this year, Powell said at a forum sponsored by the Riksbank that the Fed’s independence is necessary to fight inflation.

Recent comments by other Fed officials have supported the view that the central bank needs to remain aggressive in raising interest rates to control inflation. Fed Governor Michelle Bowman said on Tuesday that the bank will have to raise interest rates further to combat high inflation.

“Everyone is hanging on every word of the Fed,” said Tim Gresky, chief portfolio strategist at Ingalls & Snyder in New York. He added that Powell “didn’t say anything” about politics.

Investors are anxiously awaiting Thursday’s US Consumer Price Index report, which is expected to show some moderation in prices year-on-year in December.

Traders are betting on a 25 basis point rate hike at the Fed’s upcoming policy meeting in February.

“There are some indications that inflation is slowing significantly,” Gresky said. “What investors are really looking for is a gap in key inflation data that could potentially catch the Fed’s attention.”

Amazon.com Inc. (AMZN.O) Stocks rose 2.9%, giving the Nasdaq and S&P 500 indices their biggest boost.

Dow Jones Industrial Average (.DJI) It rose 186.45 points, or 0.56%, to 33,704.1 points. Standard & Poor’s 500 (.SPX) It rose by 27.16 points, or 0.70%, at 3,919.25 points. and the Nasdaq Composite (nineteenth) It added 106.98 points, or 1.01%, to 10,742.63 points.

Shares of Microsoft Corp (MSFT.O) It rose 0.8%, a day after Semafor announced, citing people familiar with the matter, that the tech company is in talks to invest $10 billion in ChatGPT owner OpenAI.

Telecommunications Services (.SPLRCL) The best performing sector today was the energy sector (.SPNY) With the rise in oil prices.

This week marks the start of fourth-quarter earnings season for S&P 500 companies, with results from several of Wall Street’s biggest banks due later this week.

Jefferies Financial Group shares in the investment bank (JEF.N) It rose 3.8 percent on Tuesday, a day after it reported its second-best year in terms of investment banking revenue. It also reported a 52.5% decline in fourth-quarter earnings.

Analysts expect the S&P 500’s overall earnings to decline 2.2% in the fourth quarter from last year, according to IBES data from Refinitiv, as concerns grow about rising prices and a growing economy.

Some investors are hoping for signs that the Fed may soon take a breather after raising the federal funds rate seven times in 2022.

The World Bank on Tuesday cut its 2023 growth forecasts on Tuesday to levels that teeter on the brink of recession in many countries as the impact of central bank rate hikes intensifies.

Trading volume on US exchanges reached 10.02 billion shares, compared to an average of 10.91 billion for the full session over the last 20 trading days.

Advances outnumbered losers on the New York Stock Exchange by a ratio of 2.33 to 1; On the Nasdaq, the ratio was 2.45 to 1 in favor of the advanced traders.

The S&P 500 posted four new highs in 52 weeks and no new lows. The Nasdaq index posted 71 new highs and 30 new lows.

Additional reporting by Anika Biswas, Amruta Khandekar and Yohan M Cherian in Bengaluru. Editing by Chingini Ganguly, Shonak Dasgupta, and Richard Chang

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