Stocks surged across the board on Tuesday, gaining momentum after Monday’s rebound as unexpectedly weak economic data bolstered hopes for a potential Federal Reserve rate cut by the end of the summer.
The S&P Global’s Purchasing Managers’ Index (PMI) for April indicated a significant deceleration in private sector growth—the slowest in four months—also highlighting reduced inflationary pressures from wages and services. Market-implied probabilities for a rate cut by the Fed as early as September jumped to 72%, up from 67% on Monday, according to CME Group’s FedWatch Tool.
Meanwhile, corporate earnings have generally exceeded expectations, with investors now eagerly anticipating results from Visa Inc. V and Tesla Inc. TSLA , slated for release after market close.
By midday trading in New York, the S&P 500 climbed 1.2%, setting the stage for its best performance in over a month. The Nasdaq 100 outperformed the broader market, up 1.5%, while the Dow Jones Industrial Average saw a more modest increase of 0.6%. The i Shares Russell 2000 ETF IWM outperformed its large-cap counterparts, jumping 1.7% and marking its most significant gain since late March.
The dollar declined by 0.4%, and Treasury yields slightly fell. In the commodities market, gold remained steady following its sharpest drop in years on Monday, while oil prices inched 1% higher. Bitcoin edged down slightly by 0.3% to $66,640.
Major Indices Price 1-day %chg
Russell 2000 2,002.50 1.7%
Nasdaq 100 17,463.15 1.5%
S&P 500 5,068.20 1.1%
Dow Jones 38,468.74 0.6%
Updated at 12:37 p.m. EDT
The SPDR S&P 500 ETF Trust SPY rose 1.2% to $505.50, the SPDR Dow Jones Industrial Average DIA rose 0.6% to $384.94 and the tech-heavy Invesco QQQ Trust QQQ rallied 1.5% to $425.11, according to Benzinga Pro data.
Sector-wise, the Communication Services Select Sector SPDR Fund XLC outperformed, up 1.8%. The Materials Select Sector SPDR Fund XLB was the major laggard, down 0.5%.
Spotify Technology S.A. SPOT saw its shares surge 17% following a robust earnings beat, setting the stock on course for its best single-day performance since its 2018 IPO. Other companies reacting to recent earnings were Globe Life Inc. GL , up 13%, GE Aerospace GE ,up 7.3%, Danaher Corp. DHR , up 7.3%, General Motors Corp. GM , up 5%, Novartis AG NVS , up nearly 3%, PepsiCo. PEP , down 2.2%, United Parcel Service, Inc. UPS , up 2%, Xerox Holdings Corporation XRX , down 11%, MSCI Inc. MSCI , down 14%, LKQ Corp. LKQ , down 14%, Halliburton Company HAL , flat, and Lockheed Martin Corporation LMT , up 0.5%.
