NEW YORK: Wall Street stocks finished higher on Tuesday (Jan 10) following a choppy session, as markets digested a downgraded global outlook from the World Bank and awaited key inflation data.
The Dow Jones Industrial Average rose 186.45 points, or 0.56%, to 33,704.1; the S&P 500 gained 27.16 points, or 0.70%, at 3,919.25; and the Nasdaq Composite added 106.98 points, or 1.01%, at 10,742.63.
Tech shares led the market as the World Bank trimmed its global growth forecast to 1.7% for 2023, citing the effects of high inflation, rising interest rates and Russia’s invasion of Ukraine.
But the biggest economic release this week as far as investors will be concerned is Thursday's (Jan 12) consumer price index (CPI) report, expected to show further moderation after big jumps in prices for much of 2022.
The CPI data will be scrutinised for its implications on Federal Reserve (Fed) policy, with the central bank enacting aggressive interest rate increases to combat inflation.
Fed chair Jerome Powell avoided tipping his hand on future policy decisions on Tuesday in a speech in Sweden, but said the insulation of the Fed from electoral politics allows it to raise interest rates if needed “without considering short-term political factors”.
“Everybody hangs on every word from the Fed,“ said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. Powell “didn’t really say anything” about policy, he added.
“There are some indications that inflation is slowing significantly. What investors are really looking for is a gap down in major inflation data that could probably get the Fed’s attention,“ Ghriskey said.
Large tech companies generally had a good day with Amazon closing 2.9% higher, Netflix up 3.9% and Facebook parent Meta rising 2.7%.
Coinbase surged 13% as it announced it was cutting 950 positions, about 20% of its workforce, following the downturn in the cryptocurrency markets. – AFP, Reuters
