US stocks crawled higher at Tuesday’s open as Wall Street processed talk of restrictive interest rates from Federal Reserve officials and thoughtful remarks from Chair Jerome Powell at an event hosted by Sweden’s central bank.
The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) were each up 0.2% to start the session. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3%.
Powell made the case for Federal Reserve independence in a speech at the Central Bank Independence Symposium in Stockholm, Sweden on Tuesday. He argued that stable inflation is the bedrock of a healthy economy and can force the Fed to take necessary measures, even if they are often unpopular.
“The case for monetary independence lies in the benefits of isolating monetary policy decisions from short-term policy considerations,” he said.
Amid certain market action, Coinbase (COIN) shares rose 4% at open after the cryptocurrency exchange announced it would cut nearly 1,000 jobs as part of a restructuring plan. The company anticipates restructuring costs of approximately $149 million to $163 million. The move marks the third round of layoffs for Coinbase since last year.
Shares in billionaire Richard Branson’s Virgin Orbit Holdings (VORB) plummeted 20% after one of the company’s rockets failed to reach its target orbit due to a technical failure.
Investors continued to watch struggling retailer Bed Bath & Beyond (BBBY), which reported earnings that missed estimates just a week after it was revealed the company was considering bankruptcy amid its financial woes.
“As we shared last week, we continue to work with advisors as we consider all strategic alternatives to achieve our near- and long-term goals,” CEO Sue Gove said in an update on Tuesday, adding that ” several avenues to be explored”.
Bumble (BMBL) shares were up more than 4% in early trade after KeyBanc upgraded the women-founded dating app from Sector Weight to Overweight, saying that “the competitive environment appears to be stable and economic pressures are easing.” .
The story goes on
Oak Street Health (OSH) shares rose 29% after Bloomberg News reported Monday that CVS Health is considering an acquisition of the primary care center operator.
Traders work on the floor of the New York Stock Exchange during afternoon trade on January 09, 2023 in New York City. (Photo by Michael M. Santiago/Getty Images)
Tuesday’s moves come after a mixed start to the week, which saw the tech-heavy Nasdaq extend gains from a rally on Friday while the other two major moving averages failed to maintain momentum. The Nasdaq rose 0.6% on Monday, while the S&P 500 and Dow closed down 0.1% and 0.3%, respectively, after two Federal Reserve officials made aggressive comments.
San Francisco Fed President Mary Daly said during a live-streamed interview with The Wall Street Journal that she expects policymakers to hike interest rates to just over 5%, adding that the final rate will ultimately depend on the course of inflation.
Atlanta Federal Reserve Chairman Raphael Bostic shared this view and also said the Federal Reserve should raise interest rates above 5% by early Q2 and then hold them there for a “long time.”
“I’m not a pivot guy,” Bostic said in a remark Monday at the Atlanta Rotary Club. “I think we should stop and stay there and let politics sink in.”
On Thursday, investors will be presented with December’s Consumer Price Index (CPI) – perhaps the most important economic release of the month and the last significant reading ahead of the January 31-February 31 Federal Reserve officials’ meeting. 1 to deliver their next rate hike.
According to data from Bloomberg, economists expect December’s headline CPI to rise 6.6% yoy, down from November’s 7.1% rise. On a month-to-month basis, the CPI was likely unchanged.
The report is likely to affect bets on whether the Federal Reserve will hike interest rates by 0.25% or 0.50% early next month.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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