Stocks gain ground on Wall Street, oil prices ease lower
Stocks closed higher on Wall Street Tuesday and oil prices eased as investors remained focused on the outlook for inflation
NEW YORK — Stocks closed higher on Wall Street Tuesday and oil prices eased as investors remained focused on the outlook for inflation. The S&P 500 rose 1.1%, the Dow Jones Industrial Average rose 0.7% and the Nasdaq rose 2%. Banks helped drive the gains, along with technology and retailer stocks. Energy stocks slipped as oil prices fell. Bond yields continued to rise a day after Federal Reserve Chair Jerome Powell said the central bank was prepared to move more aggressively in raising interest rates in its fight against inflation, if it needed to. The yield on the 10-year Treasury rose to 2.38%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks rose in afternoon trading on Wall Street Tuesday and oil prices eased back as investors remain focused on the outlook for inflation.
The S&P 500 rose 1.2% as of 3:43 p.m. Eastern. The Dow Jones Industrial Average rose 255 points, or 0.7%, to 34,807, and the Nasdaq composite rose 2%. The indexes more than made up for a modest pullback for stocks to start the week.
Banks helped send the market higher as bond yields continued rising. Higher bond yields allow banks to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 2.38% from 2.30% late Monday. Bank of America rose 2.8% and JPMorgan Chase gained 2%.
Communications and technology stocks also drove a big share of the gains in the S&P 500, as did companies that rely on consumer spending. Twitter rose 2.9% and Apple gained 2.2%. Nike added 2.6% after reporting surprisingly good third-quarter financial results. Energy stocks slipped as oil prices declined.
The price of U.S. benchmark crude oil fell 0.3% to settle at $111.76 per barrel, while Brent, the international standard, slipped 0.1% to settle at $115.48 per barrel. European markets rose broadly, while Asian markets closed higher overnight.
The broad gains follow a day of choppy trading after Federal Reserve Chair Jerome Powell said the central bank was prepared to move more aggressively in raising interest rates in its fight against inflation, if it needed to. Powell said the Fed would raise its benchmark short-term interest rate by a half-point at multiple Fed meetings, if necessary.
Last Wednesday, the central bank announced a quarter-point rate hike, its first interest rate increase since 2018. The Fed hasn’t raised its benchmark rate by a half-point since May 2000.
“What has been a frustrating inflation setup for the Federal Reserve is likely getting more complex given the geopolitical conflict,” said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth.
Investors’ concerns about persistently rising inflation has been worsened by Russia’s war in Ukraine. Energy and commodity prices were already high as demand outpaced supply amid the global economic recovery, but the conflict has pushed oil, wheat and other prices even higher.
Rising raw material costs and shipping problems have made it more expensive for businesses to operate. Many of those costs have been passed on to consumers and higher prices for food, clothing and other goods could result in less spending and slower economic growth.
Concerns about rising inflation and slower economic growth have been weighing down stocks so far in 2022, but a rally last week helped trim some of the benchmark S&P 500’s losses for the year.
The markets have been choppy as Wall Street adjusts to slower economic growth now that federal spending on various stimulus measures has faded away.
“This is actually fairly normal, but it doesn’t feel normal because the last few years have been really strong,” Stucky said.
Investors will soon start readying for the next round of corporate earnings reports as the current quarter nears its close at the end of March, and that could provide a clearer picture of how industries continue handling rising costs.
