- Investors await CPI data on Thursday
- Indexes up: Dow 0.4%, S&P 500 0.5%, Nasdaq 0.8%
NEW YORK, Jan 10 (Reuters) – U.S. stocks rose in afternoon trade on Tuesday, led by big gains in stocks on relief that Federal Reserve Chairman Jerome Powell refrained from commenting on interest rate policy in a speech.
In his first public appearance of the year, Powell said at a forum sponsored by the Swedish Central Bank that Fed independence is essential to fight inflation.
Recent comments from 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 would need to raise interest rates further to combat high inflation.
Investors eagerly awaited Thursday’s US consumer price index report, which is expected to show a slight slowdown in prices year-on-year in December.
“There are some indications that inflation is slowing significantly. What investors are really looking for is a gap in the big inflation data that could possibly get the Fed’s attention,” said Tim Grisky, senior portfolio strategist at Ingalls & Snyder in New York.
Traders are betting on a 25 basis point rate hike at the Fed’s upcoming February policy meeting.
The Dow Jones Industrial Average (.DJI) rose 119.1 points, or 0.36%, to 33,636.75, the S&P 500 (.SPX) gained 20.54 points, or 0.53%, to 3,912.63 and the Nasdaq Composite (.IXIC) added 82.96 points, or 0.78%, to 10,718.61.
Some investors are hoping for signs that the Fed may soon take a break after raising the federal funds rate seven times in 2022.
The World Bank on Tuesday sliced cut its growth forecasts for 2023 on Tuesday to levels teetering on the edge of recession for many countries as the impact of the central bank’s rate hikes deepened.
Advancers outnumbered decliners on the NYSE by a ratio of 2.06 to 1; on the Nasdaq, a ratio of 2.31 to 1 favors the advancers.
S&P 500 posts two new 52-week highs and no new lows; The Nasdaq Composite recorded 54 new highs and 25 new lows.
Additional reporting by Ankika Biswas, Amruta Khandekar and Johan M Cherian in Bengaluru; Editing by Shinjini Ganguly, Shawnak Dasgupta and Richard Chang
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