Stocks jumped ahead of Powell’s comments as markets tried to bounce back

US stocks charged higher on Tuesday as the index tried to bounce back from a sharp sell-off last week amid continued inflation and concerns over the possibility of an economic downturn.

Investors are gearing up for more FedSpike this afternoon, with Central Bank chief Jerome Powell scheduled to comment at a conference hosted by the Wall Street Journal.

The S&P 500 jumped 1.5%, and the Dow Jones Industrial Average rose 375 points, or 1.1%. Tech-heavy Nasdaq Composite rose 1.9%. The move follows a six-week decline for the S&P 500, the longest period of losses in more than a decade, and a seven-week low for the Dow Jones Industrial Average, the broadest period of weekly loss of the index since 2001.

Uncertainty around the speed and magnitude of the Federal Reserve’s rate hiking cycle has put pressure on markets that have been running throughout the year. So far in 2022, the S&P 500 is down 17% from its all-time high on January 3, while the Dow is down about 13% over the same period and the Nasdaq is deeper into a bear market – well below its record closing price of more than 20% in November.

David Bellin, chief investment officer at Citi Private Bank, told Yahoo Finance: “The market is leading the economy. “The fact that markets are down at the moment means that consumers are slowing down and the world economy is slowing down.”

The equity market has suffered “severe technical losses” in recent months, with the S&P 500 falling below the critical 4,000 level last Monday and before testing the beer market level around 3,850 last Thursday, Comerica Wealth Management Chief Investment Officer John Lynch noted in an email note.

“Surprisingly, Fed Chair Jerome Powell’s remarks point to the potential for economic pain in achieving the central bank’s objectives of reducing inflation. The catalyst for the S&P 500 rally could begin on Thursday afternoon and end on Friday,” Lynch wrote. “Nevertheless, we warn investors that it will take more than a few good days to repair the serious technical damage that has occurred in the last few months.”

Investors will have more FedSpeak in the coming days, including Powell’s remarks scheduled for Tuesday afternoon and remarks by other central bank officials scheduled for Friday.

“The troubling fact is that the Fed needs to raise rates faster than many expect and raise levels higher than many,” Chris Jacarelli, chief investment officer of the Independent Advisory Alliance, said in a recent email note. “This year there will be at least four 50 bps rate increases and not three or less and we will be cautious with risky assets.”

9:44 am ET: Retail sales rose 0.9% in April, underscoring the strength of US consumers

U.S. retail sales rose at a strong pace in April, pointing to continued strength in the U.S. economy, with consumer spending still stagnating despite persistently high inflation.

The Commerce Department said Tuesday that U.S. retail sales rose 0.9% in April, driven by increased sales of cars, electronics and expensive restaurants. Economists expect 1.0% growth, according to Bloomberg consensus.

“The desire to spend is strong among U.S. customers,” Jamie Cox, managing partner of Harris Financial Group, said in a note. “Americans have broken Covid’s shackles and are not going back. Numbers like this call into question the 2022 recession forecast in the United States.”

9:30 am ET: Stocks tried to bounce back from heavy selling last week

Here are the key indicators trading in the open market on Tuesday:

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

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

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

  • Crude (CL = F): – $ 0.02 (-0.02%) to 114.18 barrel

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

  • 10 year treasury (TNX): +8.7 bps Yield 2.9640%

7:16 am ET: Walmart misses Q1 earnings estimates when sales exceed expectations

Walmart (WMT) reported mixed first-quarter results, where still-tough consumer spending helped drive retail giant sales when earnings fell short of expectations.

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

The world’s largest retailer reported consistent earnings per share of 30 1.30, compared to the $ 1.48 expected by analysts, according to Bloomberg consensus estimates. Revenue came in at $ 141.57 billion vs. $ 139.09 expected.

Walmart has seen internal sales decline from peak rates during the height of the epidemic, while pantry-stocking and stimulus checks helped boost results. Nevertheless, the company maintained revenue growth as demand for the company’s product array was resilient, even as consumer prices rose across the country.

Doug Macmillan, president and CEO of Walmart, said in a statement: “The results below were unexpected and reflect an unusual environment.” “The level of US inflation, especially in food and fuel, has put more pressure on margin blending and operating costs than we expected. We are adjusting and balancing our customers’ demand for price with the need to increase profits for our future.”

7:11 am ET: Stock futures rise as investors digest retail earnings

Here are the key steps in early trading before opening on Tuesday:

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

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

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

  • Crude (CL = 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): 0.00 bps Yield 2.8770%

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

Shares of home improvement retailer Home Depot (HD) bounced after unveiling its first-quarter financial results on Tuesday, beating analysts’ expectations and boosting its full-year outlook.

The company had 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 sold $ 38.9 billion in net sales for the first quarter of fiscal year 2022, marking an increase of $ 1.4 billion or 3.8% over a year earlier. Analysts had expected a consistent earnings of $ 3.71 per share over $ 36.83 billion, according to Bloomberg consensus estimates.

Chief executive and president Ted Decker said in a statement: “The strong quarterly performance is even more impressive because we were comparing it to last year’s historic growth and this year saw a slow start in the spring.”

The company also raised its full-year guidelines, with sales growth expected to reach 3% and earnings per share expected to be in the mid-unit range.

6:17 pm ET Monday: Stock futures changed slightly after a narrow recovery in the market

Before the overnight session on Monday, stock futures were in extended trading here:

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

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

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

  • Crude (CL = 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 floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City.  The Dow Jones Industrial Average fell in early trade as investors worried about inflation and other global issues.  (Photo by Spencer Platt / Getty Images)

New York, New York – May 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in early trade as investors worried about inflation and other global issues. (Photo by Spencer Platt / Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow him on Twitter Alexandrandnik

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