As investors evaluate Fedspeak, stocks soar

U.S. stocks advanced at the open on Tuesday as Wall Street processed a hawkish rate cut from Federal Reserve officials. Remarks by President Jerome Powell At an event hosted by Sweden’s central bank.

S&P 500 (^ GSPC) and the Dow Jones Industrial Average (^ DJI) each rose 0.2% at the start of the session. The tech-heavy Nasdaq Composite (^IXIC) increased by 0.3%.

Powell Made the case for the independence of the US central bank In a speech on Tuesday at a seminar on central bank independence in Stockholm, Sweden. He argued that stable inflation was the bedrock of a healthy economy and that the central bank should take necessary steps, even if often unpopular.

“The case for monetary policy independence lies in the benefits of shielding monetary policy decisions from short-term political considerations,” he said.

Among specific market moves, Coinbase shares (currency) rose 4% at the open after the cryptocurrency exchange said It cut nearly 1,000 jobs as part of the restructuring plan. The company expects restructuring costs of approximately $149 million to $163 million. The move marks Coinbase’s third round of layoffs since last year.

Billionaire Richard Branson’s Virgin Orbit Holdings shares (Speech) then fell by 20% One of the company’s rockets failed to reach Its target orbit due to a technical glitch.

Investors are also looking at stricken retailer Bed Bath & Beyond (PPPY) reported earnings that missed estimates, a week after revealing the company was considering bankruptcy due to its financial struggles.

“As we shared last week, we continue to work with advisors to consider all strategic alternatives to accomplish our near- and long-term goals,” CEO Sue Gove said in an update Tuesday, adding, “Many avenues are being explored.”

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Bumble (BMBL) shares rose more than 4% in early trading after KeyBanc upgraded the women-founded dating app from sector weight to overweight, saying “the competitive environment appears stable and economic pressures are easing.”

Oak Street Health (OSH) after which the stock rose 29% Bloomberg News reported on Monday CVS Health is exploring an acquisition of an operator of primary care centers.

Traders work on the floor of the New York Stock Exchange during afternoon trading on January 09, 2023 in New York City. (Photo by Michael M. Santiago/Getty Images)

Tuesday’s moves come after a mixed start to the week that saw the tech-heavy Nasdaq extend gains from Friday’s rally, while the other two major averages failed to keep pace. The Nasdaq rose 0.6% on Monday, while the S&P 500 and Dow each fell 0.1% and 0.3%, respectively, following dovish comments from two Federal Reserve officials.

San Francisco Fed President Mary Daly said during a live broadcast interview with the Wall Street Journal that she expects policymakers. Interest rates will be raised above 5%The final rate ultimately depends on the path of inflation.

Echoing that sentiment, Atlanta Federal Reserve President Rafael Bostick said the U.S. central bank should too. Raise the interest rate above 5% At the beginning of the second quarter, then keep them there “for a long time”.

“I’m not a prominent person,” Bostick said Monday, speaking at the Atlanta Rotary Club. “I think we have to pause and hang in there and let the policy play out.”

Thursday will bring investors the December consumer price index (CPI) — perhaps the most important economic release of the month and Federal Reserve officials’ Jan. 31-Feb. 1 to deliver their next interest rate hike.

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Economists expect the CPI to rise 6.6% from a year earlier in December, a A decline from the 7.1% increase seen in NovemberAccording to data from Bloomberg. On a month-on-month basis, the CPI was flat.

The report is likely to be a bet on whether the Federal Reserve will raise interest rates by 0.25% or 0.50% early next month.

Alexandra Semenova is a Yahoo Finance reporter. Follow her on Twitter @alexandraandnyc

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