Markets

Stocks rise as investors weigh in on Fedspeak

US stocks moved ahead at the open on Tuesday as Wall Street processed talks by Federal Reserve officials on high rates and considered remarks by Chairman Jerome Powell at an event hosted by Sweden’s central bank.

The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) were each up 0.2% at the start of the session. The tech-heavy Nasdaq Composite ( ^IKSIC ) rose 0.3%.

Powell made the case for U.S. central bank independence in a speech Tuesday at the Symposium on Central Bank Independence in Stockholm, Sweden. He argued that stable inflation is the foundation of a healthy economy and can require the Fed to take necessary actions, even if they are often unpopular.

“The case for monetary policy independence lies in the benefits of isolating monetary policy decisions from short-term political considerations,” he said.

In specific market moves, shares of Coinbase ( COIN ) rose 4% at the open after the cryptocurrency exchange said it would cut nearly 1,000 jobs as part of a restructuring plan. The company expects to incur approximately $149 million to $163 million in restructuring costs. The move will mark the third round of layoffs for Coinbase since last year.

Shares in billionaire Richard Branson’s Virgin Orbit Holdings (VORB) plunged 20 percent after one of the company’s rockets failed to reach its target orbit due to a technical malfunction.

Investors continued to watch beleaguered retailer Bed Bath & Beyond ( BBBI ) report earnings that missed estimates, just a week after it revealed the company was considering bankruptcy amid financial woes.

“As we said last week, we continue to work with advisers as we consider all strategic alternatives to achieve our short and long-term goals,” chief executive Sue Gove said in an update on Tuesday, adding that “multiple avenues are being explored.”

Shares of Bumble ( BMBL ) rose more than 4% in early trading after KeyBanc upgraded the female-founded dating app from Sector Weight to Overweight and said “the competitive environment appears stable and economic pressures are easing.”

Shares of Oak Street Health ( OSH ) surged 29% after Bloomberg News reported Monday that CVS Health is exploring an acquisition of the primary care center operator.

NEW YORK, NEW YORK - JANUARY 9: Traders work at the New York Stock Exchange during afternoon trading on January 9, 2023 in New York City.  The stock market closed mixed after opening high, with the Dow Jones and S&P 500 closing lower and the Nasdaq posting a second day of gains.  (Photo by Michael M. Santiago/Getty Images)

Traders work on the New York Stock Exchange during afternoon trading on January 9, 2023 in New York. (Photo by Michael M. Santiago/Getty Images)

Tuesday’s moves come after a mixed start to the week in which the tech-heavy Nasdaq extended gains from Friday’s rally, while the other two major averages failed to sustain momentum. The Nasdaq rose 0.6% on Monday, while the S&P 500 and Dow each closed up 0.1% and 0.3%, respectively, after hawkish remarks from two Federal Reserve officials.

San Francisco Fed President Mary Daly said during a live interview with the Wall Street Journal that she expects policymakers to raise interest rates to somewhere above 5 percent, adding that the final rate will ultimately depend on the path of inflation.

Echoing that sentiment, Atlanta Federal Reserve President Rafael Bostick also said the US central bank should raise interest rates above 5% by the start of the second quarter and then keep them there for “a long time.”

“I’m not the main guy,” Bostic said in a statement at the Atlanta Rotary Club on Monday. “I think we should stop and hold back, and let the politics work.”

Thursday will bring investors December’s consumer price index (CPI) — perhaps the most important economic release of the month and the last major reading before Federal Reserve officials meet Jan. 31-Feb. 1 to deliver their next rate hike.

Economists expect headline CPI to have risen 6.6% from a year earlier in December, down from the 7.1% increase seen in November, according to Bloomberg data. On a monthly basis, the CPI is likely to have remained the same.

The report is likely to influence whether the Federal Reserve raises interest rates by 0.25% or 0.50% early next month.

Aleksandra Semenova is a Yahoo Finance reporter. Follow her on Twitter @alekandraandnic

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