Tuesday, May 03, 2022

DJIA: 33,128.79, up 67.29
S&P 500: 4,175.48, up 20.10
Nasdaq: 12,563.76, up 27.74

Stocks push higher ahead of Fed decision

Stocks pushed higher during another volatile session on Tuesday with Wall Street awaiting tomorrow’s Federal Reserve policy decision. The first 50-basis point (0.50%) rate increase since 2000 is widely expected to be announced Wednesday afternoon as the U.S. central bank aims to calm the highest inflation in more than four decades. The Dow added 67 points, while the S&P 500 gained 0.5%. The Nasdaq Composite ticked up 0.2%. Treasuries stabilized, with the yield on the 10-year note down two basis points (0.02%) to 2.97% after yesterday breaching 3.00% for the first time since December 2018.

Nine of 11 S&P 500 sectors closed in positive territory, with Energy and Financials pacing gains. The Consumer Discretionary group lagged following disappointing earnings from travel-related companies. Hilton Worldwide Holdings Inc. lost 4.2% on weak forward guidance, while Expedia Group Inc. dropped 14% after its mixed results spurred a flurry of analyst price target reductions. Elsewhere, Clorox Co. jumped 3.0% following a top and bottom line beat. In other corporate news, Western Digital Corp. rallied 14.5% following reports activist investor Elliot Investment Management urged the company to evaluate the value of spinning off one of its two key businesses.

On the data front, factory orders climbed a larger-than-forecasted 2.2% in March, while final readings on both durable and capital goods orders for the period were upwardly revised. Separately, the Jobs Opening and Labor Turnover Survey (JOLTS) further underscored a tight labor market, with available positions surging to a record 11.5 million in March. In commodities, West Texas Intermediate crude lost 2.2% to $102.88/barrel.

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