Highlights
Equities recovered in choppy trading to end narrowly mixed Tuesday as investors absorbed a disappointing US inflation reading and a batch of Federal Reserve comments. The Dow Jones industrial average declined 0.5 percent, the S&P 500 was flat, and the NASDAQ was up 0.6 percent. US Treasury yields and the dollar rose while oil prices declined.
Equities dropped early after US consumer price figures came in on the high side of expectations and appeared to confirm expectations that the Federal Reserve will need to raise rates at least another 50 basis points, and possibly more, though the latest CPI reading also confirmed the view that inflation continues to trend down. The market was also pressured by comments from Dallas Fed President Lorie Logan and New York Fed President John Williams who stressed the high level of inflation and the Fed's 'more work to do mantra. But equity investors, ever hopeful, seized on a more dovish-sounding set of remarks from Philadelphia Fed President Patrick Harker, who said the Fed is likely close to ending its tightening campaign.
The market's resilience in the face of bearish inflation reading appeared to attract buyers as the S&P again held above support around 4,100. Earnings provided mixed signals with Coca-Cola off on weaker unit sales despite a revenues beat driven by rising prices. On the plus side, Cadence Design rallied on bullish guidance. A good day for Tesla lifted autos.
Among sectors, consumer discretionary, materials, and information technology outperformed while communications services, health care, real estate, and consumer staples lagged.
Equities dropped early after US consumer price figures came in on the high side of expectations and appeared to confirm expectations that the Federal Reserve will need to raise rates at least another 50 basis points, and possibly more, though the latest CPI reading also confirmed the view that inflation continues to trend down. The market was also pressured by comments from Dallas Fed President Lorie Logan and New York Fed President John Williams who stressed the high level of inflation and the Fed's 'more work to do mantra. But equity investors, ever hopeful, seized on a more dovish-sounding set of remarks from Philadelphia Fed President Patrick Harker, who said the Fed is likely close to ending its tightening campaign.
The market's resilience in the face of bearish inflation reading appeared to attract buyers as the S&P again held above support around 4,100. Earnings provided mixed signals with Coca-Cola off on weaker unit sales despite a revenues beat driven by rising prices. On the plus side, Cadence Design rallied on bullish guidance. A good day for Tesla lifted autos.
Among sectors, consumer discretionary, materials, and information technology outperformed while communications services, health care, real estate, and consumer staples lagged.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
