Dow Leads Rally After Fed Officials' Interest-Rate Remarks

The Dow Jones Industrial Average closed almost 400 points higher on Tuesday as comments from Federal Reserve officials supported a moderate pace of interest-rate increases. The S&P 500 and the Nasdaq Composite also logged gains.

© MT Newswires Primary Image

The Dow rose 1.2% to 34,098.10. The S&P 500 and the Nasdaq added 1.4% each to 4,003.6 and 11,174.41, respectively. All sectors notched gains, led by energy, materials, and technology.

Load Error

Cleveland Federal Reserve President Loretta Mester is open to the idea of the central bank’s Federal Open Market Committee cutting the size of interest-rate hikes from 75 basis points in December, Commerzbank said in a note. San Francisco Federal Reserve President Mary Daly called on the committee to be “mindful” of the lagged effects of policy tightening and deems 5% as a “good starting point” for the terminal rate, according to the note.

The 10-year yield fell 6.2 basis points to 3.77%.

In economic news, manufacturing activity in the Mid-Atlantic region improved less than expected in November and remained in negative territory, according the Federal Reserve Bank of Richmond. The composite index this month moved up to negative-9 versus Wall Street’s negative-1 estimate.

Global economic growth is expected to slow further in 2023 as the Russia-Ukraine war continues to create “serious headwinds,” the Organisation for Economic Cooperation and Development said. Real gross domestic product is projected to grow 3.1% for 2022, before decelerating to 2.2% in 2023 and recovering to 2.7% in 2024.

West Texas Intermediate futures gained 1.4% to $81.17. US President Joe Biden “would like to replenish” the Strategic Petroleum Reserve when oil prices drop closer to $70 a barrel, Amos Hochstein, US special presidential coordinator, told CNBC.

In company news, Best Buy’s (BBY) fiscal Q3 results surpassed the Street’s expectations, prompting the electronics retailer to offer an improved full-year comparable sales outlook as it gears up for the upcoming holiday season. Shares soared nearly 13%, the top performer on the S&P 500. The worst performer on the index was Dollar Tree (DLTR), down 7.8%, after the discount retailer flagged near-term margin pressure that will probably weigh on full-year profit.

Gold was little changed at $1,755.10 per troy ounce, while silver rose 1.1% to $21.29 per ounce.

Continue Reading