Stocks are outperforming Powell’s views as markets try to recover

U.S. stocks rallied on Tuesday as indices tried to pull back from intense selling last week amid concerns over continued inflation and a recession.

Investors are preparing for a higher Fedspeak this afternoon, with central bank chairman Jerome Powell scheduled to comment at a conference hosted by the Wall Street Journal.

The S&P 500 was up 1.5%, and the Dow Jones Industrial Average was up 375 points, or 1.1%. Tech-Heavy Nasdaq Composite increased 1.9%. The move follows a six-week decline for the S&P 500, its long-term losses of more than a decade and seven weeks following the broader period Dow Jones Industrial Average of the weekly losses index since 2001.

Uncertainty about the pace and magnitude of the Federal Reserve’s rate hike cycle has triggered year-round market pressure. So far in 2022, the S&P 500 is approximately 17% lower than its all-time high on January 3, while the Dow is down 13% over the same period and the Nasdaq is down sharply in the bear market – more than 20%. Below its record closing price in November.

“Markets are driving the economy,” David Bailey, chief investment officer at Citi Private Bank, told Yahoo Finance. “As markets are low at this point, consumers are declining and the world economy is slowing.”

Equity markets have borne “severe technical damage” in recent months, with the S&P 500 falling below the critical 4,000 level last Monday before testing bearish levels near 3,850, Comerica Wealth Management CEO John Lynch pointed out in an email.

“Interestingly, comments by central bank chairman Jerome Powell pointing to the potential for economic pain to achieve the central bank’s goal of reducing inflation may have lasted from Thursday afternoon until the end of Friday for the S&P 500 rally,” Lynch wrote. “However, we warn investors that it will take more than a few good days to repair the severe technical damage that has occurred over the past several months.”

Investors will receive more Fedspeak in the coming days, including Powell’s comments on Tuesday afternoon and talks involving other central bank officials that will take place until Friday.

“The embarrassing fact is that the central bank must raise rates faster and higher than many expected,” said Chris Sackerelli, chief investment officer at the Independent Advisory Coalition, in a recent email. “There will be at least four 50 pps rate hikes this year, three or less, and we will continue to be vigilant on risk assets.”

9:44 am ET: Retail sales rise 0.9% in April, underscoring US consumer strength

U.S. retail sales rose at a steady pace in April, indicating continued strength in the U.S. economy, which is still holding back consumer spending despite high inflation.

U.S. retail sales rose 0.9% in April, the Commerce Department said Tuesday, boosting sales of cars, electronics and spending restaurants. According to Bloomberg Consensus data, economists expect a 1.0% improvement.

Jamie Cox, managing partner of Harris Financial Group, said in a note, “Spending is strong among American consumers.” Numbers like these call into question the US’s 2022 recession forecast. “

9:30 am ET: Shares are trying to recover from last week’s sell-off

Here is where the key indices traded in the open market on Tuesday:

  • S&P 500 (GSPC): +62.72 (+ 1.56%) to 4,070.73

  • Dove (DJI): +450.12 (+ 1.40%) to 32,673.54

  • Nasdaq (IXIC): +240.94 (+ 2.07%) to 11,903.73

  • RawCL = F): – $ 0.02 (-0.02%) to $ 114.18 a barrel

  • Gold (GC = F): From $ 11.30 (+ 0.62%) to $ 1,825.30 per ounce

  • 10 year treasury (TNX): 2.8640% to get +8.7 bps

7:16 am And: Walmart misses Q1 earnings ratings, while sales grow higher than expected

Walmart (WMT) Mixed first quarter results suggestMore solid consumer spending helped retail businesses stimulate sales, while earnings were lower than expected.

Shares fell more than 6% in pre-market trading.

According to Bloomberg Consensus estimates, the world’s largest retailer recorded a correction of $ 1.30 per share, compared to the $ 1.48 expected by analysts. Revenue was $ 141.57 billion against the expected $ 139.09.

While Walmart was at the peak of epidemics domestically, the rise in pantry-stocking and trigger checks helped boost sales, while sales growth fell from a record high. However, despite rising consumer prices across the country, the company has been able to sustain revenue growth as demand for the company’s product line remains resilient.

In a statement, Wal-Mart President and CEO Doug McMillan said, “Basic results are unexpected and reflect an extraordinary environment.” We are adjusting and balancing the needs of our customers with value.

7:11 am ET: The stock futures rise as investors digest retail returns

Here are the key moves of the early trade before the start of Tuesday:

  • S&P 500 Futures (EN = F): +63.00 (+ 1.57%) to 4,067.75

  • Dow Futures (YM = F): +406.00 (+ 1.26%) to 32,565.00

  • Nasdaq Futures (NQ = F): +232.74 (+ 1.90%) to 12,477.50

  • RawCL = F): + $ 0.68 (+ 0.60%) to $ 114.88

  • Gold (GC = F): $ 11.50 (+ 0.63%) to $ 1,825.50 per ounce

  • 10 year treasury (TNX): 0.8 bps for 2.8770% yield

7:03 am: Home Depot up 4% on strong quarterly results

Shares of Home Depot, a home improvement retailer (HD) Bounce in early trading on Tuesday after the company Published first quarter financial results It surpassed analyst estimates and raised its full-year outlook.

The company reported net income of $ 4.23 billion or $ 4.09 per share for the three months ended March 31, compared to $ 4.15 billion or $ 3.86 per share in the same period last year. Home Depot’s net sales reached $ 38.9 billion in the first quarter of fiscal 2022, up $ 1.4 billion or 3.8% from a year earlier. According to Bloomberg’s consensus estimates, analysts expect $ 3.71 billion in adjusted returns on $ 36.83 billion.

“Consistent performance this quarter is even more impressive compared to last year’s historic growth, and we started the spring slowly this year,” CEO and President Ted Decker said in a statement.

The company also raised its full-year guidance, with sales growth expected to be 3% and earnings per share to be in the mid-single digits.

6:17 pm and Monday: The stock futures changed slightly following a brief recovery in the markets

Here is where the stock futures were in extended trading prior to Monday night’s session:

  • S&P 500 Futures (EN = F): -1.00 (-0.02%) to 4,003.75

  • Dow Futures (YM = F): -4.00 (-0.01%) to 32,155.00

  • Nasdaq Futures (NQ = F): +4.50 (+ 0.04%) to 12,249.25

  • RawCL = F): – $ 0.51 (-0.45%) to $ 113.69

  • Gold (GC = F): + $ 10.20 (+ 0.56%) to $ 1,824.20 per ounce

  • 10 year treasury (TNX): -5.8 bps Yield 2.8770%

New York, New York – May 12: Traders work on the New York Stock Exchange (NYSE) platform on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in the morning trade as investors continued to worry about inflation and other global issues. (Photo by Spencer Flat / Getty Images)

Alexandra Semanova is a Yahoo Finance correspondent. Follow her on Twitter @alexandraandnyc

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