Stocks Rebound, Powell Testifies—and What Else Is Happening in the Stock Market Today

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Fed Chairman Jerome Powell heads to the Senate to hear his second term nomination on Tuesday.

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Photo by Anna Moneymaker/Getty Images

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The stock index moved into positive territory on Tuesday, with gains in technology stocks. Bond yields remained well below their highs, although markets were still showing concerns about tighter monetary policy.

The Dow Jones Industrial Average was up 39 points, or 0.1%, while the S&P 500 was up 0.4%. The tech-heavy Nasdaq Composite gained 0.9%. Earlier on Tuesday morning, all three indices were in the red mark. The tech-heavy Nasdaq bounced back late on Monday to break a four-day losing streak that saw a 9% drop from its all-time high at the end of November.

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The Nasdaq has gained about 4% from the low-hit Monday of its recent pullback. A key factor enabling gains in tech stocks: The 10-year Treasury yield has been below 1.8% for the past two days, hitting pandemic-era highs. It is 1.76%, and investors are relieved. Higher long-term bond yields make future profits less valuable — and many tech companies have been raking in large profits several years down the road.

The rising yield comes as investors continue to adjust to an environment of higher inflation and tighter monetary policy. The Federal Reserve – as indicated in recent weeks – could lead to earlier and more rapid interest rate hikes and ultimately quantitative tightening.

While tech stocks have risen in the past few days, others have not. Economically sensitive, or “cyclical” sectors have seen stocks following a mixed move. For example, industrialists on the S&P 500 were fluctuating on Tuesday between minor losses and gains.

The expected Fed rate hike is driving some of that. The 2-year Treasury yield, which forecasts short-term rate hikes over the next few years, rose to 0.92% from a closing level of 0.87% on Friday.

This is not particularly surprising. Atlanta Fed President Rafael Boustik reiterated Tuesday that the Fed is ready to act quickly to reduce inflation.

“The Fed seeks to slow economic growth and it appears they are moving quickly to do so,” wrote 22 Research founder Dennis Debushre.

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Fed Chair Powell will likely have some say in whether yields remain vested and the stock market remains calm as he faces the Senate Banking Committee for his second-term nomination hearing. his prepared remarks Indicate that inflation and rate hikes are in focus; MPs will also get a chance to ask questions to the central banker.

Powell has yet to say anything “hawkish” or supportive of the markets and the economy about the policy. Another factor in gains is in tech stocks, which were “oversold” a few days ago, said John Kolovos, chief technical strategist at Macro Risk Advisors.

Bitcoin, which has had a rough start to 2022, was bouncing back. bitcoin seen on monday,
Leading cryptocurrency trading below $40,000 for the first time since September 2020. It was trading in losses on Tuesday and traded above $42,500.

The overseas, pan-European stokes 600 rose 0.8%, while trade in Asia was more subdued amid regional COVID-19 concerns. Tokyo’s Nikkei 225 fell 0.9% as Japan extended tighter border measures through the end of next month.

Here are 8 stocks trending Tuesday:

Shares of Alcoa (ticker: AA) fell 0.7% as the aluminum giant’s stock was downgraded from hold to hold by analysts at Deutsche Bank. The stock has more than doubled in the past year.

Big Lot (BIG) stock dropped 3.5% after management lowered its fiscal fourth-quarter guidance. The reduction in foot traffic to the shops was blamed on the fast-spreading Omicron version of COVID-19. This is a sentiment shared by many other retailers in recent times.

Shake Shack (SHAK) stock rose 16% after reporting fourth-quarter revenue above Wall Street estimates. But management warned that some locations have had to reduce their hours due to staff shortages due to the Omicron cases.

Illumina (ILMN) stock gained 13% after delivering fourth-quarter and fiscal-year 2022 revenue guidance ahead of analyst consensus. The gene-sequencing company also announced new partnerships in cancer diagnosis and treatment and other areas.

Pfizer’s (PFE) stock fell 0.1% and its Covid-19 vaccine co-developer BioNTech (BNTX) fell 4.1%. Pfizer has said it should be able to launch a newly designed vaccine to target the Omicron version of the coronavirus by March.

Rivian (RIVN) extended earlier losses to 3.8% after chief operating officer Rodney Kopps went public.

International Business Machines (IBM) fell 2.8% after UBS cut it to sell from neutral.

Write to Nicholas Jasinski at [email protected] and Jack Denton at [email protected]

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