NEW YORK: Wall Street’s main indexes were little changed in choppy trading on Tuesday, as investor focus remained on a key inflation report due later this week that could influence the Federal Reserve’s upcoming interest rate verdict. Most megacap and growth stocks advanced, with Google-parent Alphabet jumping 3.6% after it unveiled a new-generation chip on Monday, that the company said helped overcome a key challenge in quantum computing. The stock pushed the communication services sub-sector up 1.8% to an all-time high. Some gains were offset by a 7.2% decline in Oracle after the cloud computing company missed Wall Street estimates for second-quarter results. It weighed on server makers such as Dell and Hewlett Packard that fell 4.3% and 3.7% respectively. Five of the 11 major S&P sectors were down with real estate stocks leading losses with a 1.2% fall.
At 11:37 a.m. ET, the Dow Jones Industrial Average rose 48.32 points, or 0.11%, to 44,450.25, the S&P 500 lost 0.05 points, or 0.00%, to 6,052.80 and the Nasdaq Composite lost 3.96 points, or 0.02%, to 19,732.73.
A November reading of the consumer price index (CPI), due on Wednesday, is among the last major datasets ahead of the Fed’s Dec. 17-18 meeting. Headline inflation is expected to have risen slightly last month. “The expectation certainly has been that we’re (going to) see a rate cut (in December) and I don’t know if these numbers are going to be enough to shift it,” said Paul Nolte, senior wealth adviser and market strategist for Murphy & Sylvest.
Trader bets on the Fed delivering another 25 basis point interest rate cut next week stand at over 87%, according to CME’s FedWatch Tool. Bets had jumped after Friday’s employment report that showed a surge in job growth but also marked an uptick in unemployment. However, bets indicate the central bank is expected to pause its easing cycle in January, as a host of Fed officials last week hinted at a slower pace of monetary policy easing on the back of a resilient economy.
US equities started their year-end journey on a broadly positive note, with the benchmark S&P 500 and the tech-heavy Nasdaq logging gains in their first week, building upon a stellar November after Donald Trump’s win in the presidential election on hopes of business-friendly policies improving corporate performance. Among other notable movers, software firm MongoDB slipped 13.2% despite raising its forecast for annual results.
Alaska Airlines jumped 14.2% as the carrier raised its fourth-quarter profit forecast, while Boeing added 5.3% after Reuters reported the planemaker restarted production of its 737 MAX jets last week. Pinterest slipped 3.1% as Piper Sandler downgraded its rating on the image-sharing platform to “neutral” from “overweight”, while eBay eased 3.2% after Jefferies lowered the e-commerce firm’s rating to “underperform” from “hold”.
Declining issues outnumbered advancers by a 1.39-to-1 ratio on the NYSE and by a 1.36-to-1 ratio on the Nasdaq. The S&P 500 posted eight new 52-week highs and two new lows, while the Nasdaq Composite recorded 57 new highs and 64 new lows.
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