DJIA: 33,180.14, up 264.36
S&P 500: 4,160.68, up 39.25
Nasdaq: 12,175.23, up 113.86
Stocks reverse losses, rise for second day
U.S. stocks finished firmly higher during a volatile session Tuesday as investors continued to weigh economic uncertainty ahead of Friday’s update on U.S. inflation. The Dow rallied 264 points, while the S&P 500 climbed nearly 1%. The Nasdaq Composite rose 0.9%. Treasuries strengthened, recouping some of yesterday’s sell-off. The yield on the 10-year note slid six basis points (0.06%) to 2.98% after reclaiming the 3.00% level for the first time in nearly a month on Monday. In commodities, West Texas Intermediate crude climbed 1.3% to $120.01/barrel.
Ten of 11 S&P 500 sectors finished in positive territory, with Energy pacing the gains. The Consumer Discretionary group was the lone laggard with Target Corp. sliding 2.3% after the retailer slashed its profit forecast for a second time in just three weeks amid excess inventory. In earnings, J.M. Smucker Co. advanced 5.9% as analyst commentary leaned positive despite the company providing lower-than-expected full-year earnings estimates.
Global central bank tightening remained in focus. The Reserve Bank of Australia increased its benchmark rate by a larger-than-expected 0.50%, while the European Central Bank is widely anticipated to announce the end of its bond buying program this week, setting the stage for rate hikes in July. Meanwhile, Federal Reserve officials are in their quiet period ahead of next week’s June 14-15 meeting.
On the data front, the U.S. trade deficit narrowed the most on record (in dollar terms) in April to $87.1 billion from the prior month’s $107.7 billion shortfall as COVID-19 lockdowns in China pressured imports. An update on consumer credit showed borrowing surged by a bigger-than-expected $38.1 billion in April.
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