NEW YORK: Wall Street’s main indexes climbed on Tuesday following a choppy start to the session as falling US Treasury yields supported megacap growth stocks, while investors awaited more commentary by Federal Reserve officials to gauge the interest rate path.
Treasury yields slipped on Tuesday ahead of large bond auctions this week, with the benchmark ten-year Treasury yield last at 4.5892%.
While investors have priced in an end to the Fed’s interest rate hiking cycle, concerns that the central bank will keep rates at their current level for longer have gripped markets following hawkish comments from some Fed officials.
Federal Reserve Bank of Minneapolis President Neel Kashkari doused hopes of early rate cuts, saying the central bank may have to do more to bring inflation back down to its 2% target.
Chicago Fed chief Austan Goolsbee acknowledged the downward trend in inflation but maintained price pressures are not yet over.
Megacap growth names such as Microsoft, Apple and Amazon.com rose between 1.1% and 2.2%, helping the tech-heavy Nasdaq outperform peers.
“Originally, higher rates placed concern on the multiples of these stocks (but) it’s shifting now to the idea that they may be a defensive place to be in this market. They have fairly bulletproof balance sheets,” said Rick Meckler, partner at Cherry Lane Investments, in New Vernon, New Jersey.
Five of the 11 major S&P 500 sectors traded higher, with information technology, consumer discretionary and communication services leading gains.
Energy stocks were the top decliners, down 2.4% as crude prices fell on mixed economic data from China.
Market participants will parse commentary from New York Fed President John Williams later on Tuesday for more clues on the central bank’s interest rate path. Fed Chair Jerome Powell’s remarks will grab the spotlight on Wednesday.
The S&P 500 is set for its seventh straight day in the green, while the Nasdaq is on track to rise for the eighth day in a row.
“Investors are not yet ready to completely jump back in. We’re more likely to have a mixed market where you see sector rotation than we are to see a very significant year-end rally,” Meckler said.
At 11:46 a.m. ET, the Dow Jones Industrial Average was up 93.99 points, or 0.28%, at 34,189.85, the S&P 500 was up 16.50 points, or 0.38%, at 4,382.48, and the Nasdaq Composite was up 131.18 points, or 0.97%, at 13,649.96.
Uber Technologies rose 3.5% as the ride-hailing firm projected fourth-quarter adjusted core profit above estimates.
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