Stocks Rise Ahead of Powell Talk

Stocks Rise Ahead of Powell Talk

U.S. stock indexes climbed Tuesday as investors snapped up beaten-down shares in technology, banking and other sectors.

The S&P 500 rose 1.4% in morning trading, while the Dow Jones Industrial Average added 0.9%. The tech-heavy Nasdaq Composite jumped 1.7%, rebounding after it fell 1.2% on Monday in a late-session selloff.

U.S. stocks have taken a beating in recent weeks as investors tried to assess the path for markets amid wide-ranging economic, geopolitical and Covid-19 concerns. Weighing most heavily on many investors’ minds is the outlook for the U.S. economy as the Federal Reserve lifts interest rates to combat inflation.  

On Tuesday, fresh data from the Commerce Department showed some signs of economic resilience, with U.S. shoppers increasing retail spending in April for the fourth straight month. That, as well as the reopening of some stores in Shanghai this week after a strict Covid-19 lockdown, provided some sources of optimism.

Later Tuesday, investors will hear from Fed Chairman

Jerome Powell

at The Wall Street Journal’s Future of Everything Festival. Market watchers are also continuing to assess the effects of the war in Ukraine, as well the outlook for China’s economy. 

Many investors expect more choppiness ahead. The Nasdaq Composite, for example, has swung 1% or more in either direction in all but two of May’s 11 sessions.

“I think for better or worse, this is often a pattern that we see in bear markets,” said

Andrew Sheets,

chief cross-asset strategist at

Morgan Stanley.

“You do get these reversals that happen quite frequently…and I think that makes it hard to trade.” 

Morgan Stanley currently has a year-end price target of 3900 for the S&P 500, implying that the index still has further to fall. As of Monday, the S&P 500 was down 16% from its January high, putting it close—but not quite yet—in bear market territory. A bear market is defined as a drop of at least 20% from a recent high.

“We’re seeing the most aggressive tightening [of monetary policy] in decades against the backdrop of a very uncertain economic outlook and a squeeze on households,” said

Craig Erlam,

senior market analyst at Oanda. Last week’s U.S. inflation data, which showed that pricing pressures edged down just slightly in April, was worrisome, he said.

“It’s not just that [inflation] accelerated fast on the way up. The prospect of it decelerating slowly on the way down is a major concern,” he said.

Tech stocks were among the winners in Tuesday trading. Chip-maker


jumped 4.4%,


added 2.8%, and


gained 1.8%.

Shares of


rallied 6.9% after a securities filing showed

Warren Buffett’s Berkshire Hathaway Inc.

bought around $3 billion worth of shares in the bank.


stock climbed 0.5% to around $37.55 a share even after Tesla chief executive

Elon Musk

said his $44 billion bid for the social-media company can’t move forward until the company is clearer about how many of its accounts are fake. Twitter has now wiped out all the gains it notched after Mr. Musk disclosed a stake in the company in April and is trading well below his deal that values the company at $54.20 a share. If the stock finishes lower Tuesday, it would mark the eighth consecutive decline for Twitter. 


slumped 8.2% after the retail giant reported that earnings fell sharply from the same period last year, hurt by higher supply-chain and labor costs.

Home Depot

shares ticked up 0.1% after the home-improvement retailer boosted its outlook for the year and said shoppers were spending more per shopping trip.

Traders worked on the floor of the New York Stock Exchange on Monday.


justin lane/Shutterstock

In the bond market, the yield on the benchmark U.S. 10-year Treasury note rose to 2.964% from 2.877% Monday, on pace to reverse a downward stretch for yields. As of Monday, the yield on the 10-year note had fallen for five of the past six trading days.

The price of bitcoin stabilized, recently trading at around $30,342, up 1.5% from its level at 5 p.m. ET on Monday. 

The relative calm in Tuesday’s markets sent the WSJ Dollar Index falling 0.6%. The index, which measures the greenback against a basket of 16 other currencies, has been one of the few to notch consistent gains this year in a market that has given investors few other places to hide. Even with its decline, the haven asset is still hovering near its highest level since March 2020.

Futures on Brent crude oil, the international energy benchmark, climbed 0.9% to $115.29 a barrel.

In Europe, the pan-continental Stoxx Europe 600 advanced 1.2%, on pace to extend its winning streak to three days. Gains across the region were broad-based, with banks, transport companies and energy producers rising. 

In Asia, Hong Kong’s Hang Seng jumped 3.3%, notching its third consecutive gain. Japan’s Nikkei 225 added 0.4%, also extending its winning streak to three sessions. The Shanghai Composite gained 0.6% after falling Monday.

Write to Caitlin McCabe at [email protected]

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