Stocks rose for another session on Tuesday as investors assessed sliding yields and new data for further clues about the health of the US economy. Wall Street also expected earnings from major technology companies.
The Dow Jones Industrial Average traded up 292 points, or 0.9%, after reaching more than 300 points several times during the day. The S&P 500 advanced 1.5% and the Nasdaq Composite advanced 2.1%.
Tuesday’s moves add to the strong rallies seen in the previous two sessions. On Monday, the Dow and S&P 500 each gained more than 1%, while the Nasdaq advanced 0.9%. On Friday, the Dow rose more than 700 points.
A decline in yields contributed to the recent gains. The yield on the benchmark 10-year Treasury note was last down about 12 basis points to 4.108%. The 2-year Treasury yield fell about 3 basis points to 4.468%.
Taken together, the yield and big moves in the index are signs that investors will “double down on expectations for an easier Fed,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.
Hodge said Tuesday’s economic data is also a point of hope for investors looking for the Federal Reserve to change course on interest rate hikes as the central bank tries to curb inflation.
The S&P CoreLogic Case-Shiller 20-City House Price Index released Tuesday showed home prices fell 1.3 percent in the 20 core cities surveyed month-on-month in August, but were still 13 .1% more than a year ago. The consumer confidence index also fell, showing the outlook for the economy has deteriorated after two months of improving outlooks.
“The market is starting to get some indication that the economic data going forward is likely to slow down,” Hodge said. “The knock-on effects from here, perhaps, give the Fed a little more breathing room.”
In addition to this, traders studied a bit of corporate reports. General Motors and Coca-Cola rose 1.4% and 2.5%, respectively, after reporting better-than-expected profits. Xerox plunged 14.5% after earnings per share came in less than half of expectations.
So far this season, the companies have shown they can be better than expected. FactSet data shows that as of Tuesday morning, 71% of companies that reported beat analysts’ earnings-per-share expectations.
Meta Platforms and Microsoft report on Wednesday, followed by Amazon and Apple on Thursday. Given its large size and market cap, any move is likely to propel the market forward.