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March CPI data awaited on Wednesday
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CarMax rallies on quarterly profit beat
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Crypto stocks climb as bitcoin hits 10-month high
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Indexes: Dow up 0.41%, S&P climbs 0.12%, Nasdaq down 0.39%
(Updates prices)
By Sruthi Shankar and Ankika Biswas
April 11 (Reuters) - The benchmark S&P 500 edged higher
on Tuesday, with economy-sensitive energy and material stocks
leading gains ahead of Wednesday's inflation data that is likely
to determine the U.S. Federal Reserve's next policy move.
Losses in megacap stocks such as Microsoft Corp and
Amazon.com Inc weighed on the tech-heavy Nasdaq as U.S.
Treasury yields crept higher, while gains in industrial stocks
such as Caterpillar Inc boosted the Dow.
Hopes that the Fed will soon end its aggressive monetary
policy tightening campaign spurred a rebound in the S&P 500 this
month after the collapse of two U.S. mid-sized lenders sparked a
selloff in March.
A strong labor market report on Friday, however, lifted bets
that the U.S. central bank will increase rates by 25 basis
points in May, with money market traders pricing in a nearly 70%
chance of such a move, according to CME Group's Fedwatch tool.
This marks a shift in traders' bets of a pause in the Fed's
policy tightening after recent weak economic data raised the
possibility of a U.S. recession.
"People are waiting for the important events - CPI, PPI and
banks that are going to report earnings," said Randy Frederick,
managing director of trading and derivatives at Charles Schwab.
"If the Fed does get to a point where it simply holds rates
steady, the markets can potentially do well with that. My
concern is if they continue to tighten, it's going to continue
to cause stress on some banks."
Data on Wednesday is expected to show consumer prices grew
5.2% in March after a 6.0% rise in February. However, core
prices are seen rising 5.6%, at a slightly faster pace compared
with a 5.5% rise in February.
Investors will also scrutinize earnings reports from the big
U.S. banks Citigroup Inc , JPMorgan Chase & Co and
Wells Fargo & Co on Friday for clues on the overall
health of the banking sector.
Analysts expect first-quarter profits at S&P 500 companies
to fall 5.2% year-on-year, the worst contraction since the third
quarter of 2020 and a stark reversal from the 1.4% annual growth
forecast at the beginning of the year, according to Refinitiv
IBES data.
At 12:03 p.m. ET, the Dow Jones Industrial Average was up 136.25 points, or 0.41%, at 33,722.77, the S&P 500 was up 5.13 points, or 0.12%, at 4,114.24, and the Nasdaq
Composite was down 46.54 points, or 0.39%, at 12,037.82.
Remarks later on Tuesday from voting members of the Fed's
rate-setting committee will be parsed for more clues on the
central bank's policy moves.
Seven of the 11 major S&P sectors rose, with gains in
material and energy shares offsetting losses
in technology stocks.
Shares of crypto-related companies such as Coinbase Global
Inc , Riot Platforms Inc and Marathon Digital
Holdings Inc climbed between 8% and 12% as bitcoin breached the key $30,000 level for the first time in
10 months.
CarMax Inc rallied 11.4% as the used-car retailer
reported a quarterly profit that beat estimates.
Moderna Inc fell 4.3% as the company said its
closely watched flu vaccine did not meet the criteria for early
success in a late-stage trial.
Advancing issues outnumbered decliners for a 3.58-to-1 ratio
on the NYSE and a 1.56-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and no new
lows, while the Nasdaq recorded 43 new highs and 72 new lows.
(Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru;
Editing by Shounak Dasgupta)
