U.S. stocks ended with nominal gains on Tuesday after moving in a narrow range as investors parsed conflicting remarks from Federal Reserve officials, with upbeat consumer data providing some lift.
All three major U.S. stock indexes lost momentum as the session progressed.
“Even marathon runners have to pause, to take a breath and a drink of water. That doesn’t mean the race is over,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. “It’s been a very strong November, and investors have every reason to be optimistic into year-end.”
Market participants are now scrutinizing remarks from monetary policymakers ahead of next month’s meeting of the Federal Open Market Committee (FOMC).
Fed Governor Christopher Waller said on Tuesday he is “increasingly confident” that the current level of central bank’s policy rate is sufficiently restrictive and even hinted at the possibility of rate cuts in the months ahead should inflation continue to fall closer to the Fed’s 2% target.
Chicago Fed President Austan Goolsbee touted progress in bringing inflation down at a pace not seen since the 1950s.
On the other hand, remarks from Fed Governor Michelle Bowman suggested another rake hike could be necessary to rein in inflation in a timely manner.
“The (Fed’s) mixed messaging is fairly normal and it occurs every time the Fed is near the end of a cycle, as certain members of the FOMC and certain Fed governors will feel more strongly than others that it’s time to stop (tightening),” Pursche added.
Financial markets have priced in a near-certain 98.9% likelihood that the FOMC will let the Fed funds target rate stand at 5.25%-5.50% when it convenes next month, according to CME’s FedWatch tool.
The crucial holiday shopping season has shifted into high gear, with survey data from the National Retail Federation suggesting consumers plan to spend about 5% more this year.
That corresponds with the Conference Board’s consumer confidence data released early Tuesday, which surprised to the upside due to improved near-term expectations.
Later in the week, the Commerce Department is due to release its second estimate for third-quarter Gross Domestic Product, and its broad-ranging Personal Consumption Expenditures (PCE) report, which covers income, spending and crucially, inflation.
According to preliminary data, the S&P 500 .SPX gained 4.40 points, or 0.10%, to end at 4,554.91 points, while the Nasdaq Composite .IXIC gained 40.73 points, or 0.29%, to 14,281.76. The Dow Jones Industrial Average .DJI rose 82.74 points, or 0.23%, to 35,416.21.
Boeing BA.Nadvanced after RBC Capital Markets upgraded the stock to “outperform” from “sector perform.”
U.S.-listed shares of Chinese e-commerce firm PDD Holdings PDD.O surged after the company beat revenue estimates.
Affirm Holdings AFRM.Ojumped, extending its Cyber Monday boost.
Chipmaker Micron Technology’sMU.O shares dipped after the company said it expects higher first-quarter operating expenses than previously forecast.
