The record-breaking rally in US stocks took a breather on Tuesday as traders awaited a speech from US Federal Reserve (Fed) Chair Jerome Powell ahead of inflation data due later in the week.
The S&P 500 Index was little changed at 9.45 am in New York, with the gauge stalling around all-time highs. The tech-heavy Nasdaq 100 Index also held steady. The week is light on data, with traders preparing for Friday, when the Fed’s preferred inflation gauge — the core PCE index — is released.
“Investors continue to have a ‘glass half full’ mindset, with bears unable to gain traction despite elevated valuations and concern over the labor market,” said Nationwide’s Mark Hackett. “While the strength of the market is notable (gains in six of the last seven weeks, 28th record close of the year), the stability of the market is more impressive, with no daily move over 1% in over a month.”
Fed Chair Powell is set to make his first public remarks Tuesday since last week’s interest-rate cuts as the market is looking for fresh signals on the interest rate path. With the next earnings season looming, stocks face a big test going into the tail end of the year.
Earlier, Fed Governor Michelle Bowman delivered a speech, saying policymakers were in danger of falling behind the curve and need to act decisively to bring down interest rates as the labor market weakens. Bowman also warned that the Federal Open Market Committee (FOMC) might need to lower rates more quickly in the months ahead. Other speakers from the central bank due today include Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee.
Since the Federal Reserve cut interest rates last week, the market has pushed US stocks to three-straight record closing highs. The enthusiasm seemed to have waned on Monday, though the tech sector helped secure a fresh all-time closing high. A partnership announcement between Nvidia Corp and OpenAI helped the record push.
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Meanwhile, an unprecedented rally in gold has seen the metal hit a record high as China looks to strengthen its standing in the global bullion market. Bloomberg reported that the People’s Bank of China is looking to become custodian of foreign sovereign gold reserves.
“We are in the midst of an ‘everything’ rally, with strength in equities across the risk spectrum, bonds, gold, and crypto,” said Nationwide’s Hackett. “Bulls are enjoying a technically driven tailwind, paired with better-than-feared economic data as we await the benefit of fiscal and monetary policy.”
Among singular stocks, Kenvue Inc rallied from a record low as President Donald Trump’s call for pregnant women to avoid Tylenol drew sharp criticism from researchers. Boeing Co. gained as the planemaker secured an order from Uzbekistan Airways and the US Ambassador to China indicated a major order from the world’s second-largest economy is close to being finalised.
