NEW YORK: Wall Street’s main indexes rose in choppy trading on Tuesday, with the Nasdaq nar a three-week high as tech shares climbed on growing bets that the Federal Reserve will soon cut interest rates.
Boeing led the blue-chip Dow, surging 7.9 percent after the planemaker forecast higher deliveries for its 737 and 787 jets next year.
The information technology sector led gains on the S&P 500, while most other sectors were in the red. A broader chip index gained 1 percent and Intel rose 6 percent.
The rebound followed a sour start to December, when all three major indexes snapped a weeklong winning streak on Monday, under pressure from rising Treasury yields and a sharp selloff in crypto-linked shares.
Recent data has pointed to a gradually cooling economy, but most policymakers have urged caution on rate cuts, warning that inflation pressures could resurface.
However, a run of dovish remarks from key voting members in recent weeks has traders now betting on an 87.4 percent chance of a 25-basis-point cut next week - nearly double the odds seen a month ago, according to the CME Group’s FedWatch Tool.
The Fed is really torn between the public pressure to reduce rates versus the actual reality of the economy, said Peter Andersen, founder of Andersen Capital Management.
“Even though there are some pockets of weakness, in general the trend is strong and so I don’t think lower rates are warranted at this point.”
Friday’s release of the Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, could sharpen expectations for the central bank’s policy call next week.
At 11:22 a.m. ET, the Dow Jones Industrial Average rose 142.87 points, or 0.30 percent, to 47,432.20, the S&P 500 gained 8.74 points, or 0.13 percent, to 6,821.37 and the Nasdaq Composite gained 80.49 points, or 0.35 percent, to 23,356.41.
Warner Bros Discovery rose about 1 percent after reports said that it received a second round of bids, including an offer from Netflix.
Crypto stocks including Strategy and Coinbase rose 4 percent and 2.6 percent, respectively, as bitcoin prices showed signs of stabilizing after its largest dollar loss since May 2021 in the previous session.
Declining issues outnumbered advancers by a 1.08-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the Nasdaq.
The S&P 500 posted nine new 52-week highs and two new lows while the Nasdaq Composite recorded 54 new highs and 64 new lows on Tuesday.
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