Stocks jump ahead of Powell speech as markets try to make comeback

U.S. stocks rose on Tuesday as indexes attempted to pull back from last week’s intense sell-off on concerns over persistent inflation levels and the prospect of an economic slowdown.

Investors are bracing for more Fed speech this afternoon, with central bank Governor Jerome Powell scheduled to speak at a conference hosted by the Wall Street Journal.

The S&P 500 gained 1.5% and the Dow Jones Industrial Average gained 375 points, or 1.1%. The tech-heavy Nasdaq Composite rose 1.9%. It followed a six-week losing streak for the S&P 500, its longest losing streak in more than a decade, and a seven-week losing streak for the Dow Jones Industrial Average, its biggest weekly loss since 2001.

Uncertainty over the pace and magnitude of the Fed’s rate hike cycle has weighed on the broader market throughout the year. So far in 2022, the S&P 500 is about 17% below its all-time high on Jan. 3, while the Dow is down about 13% over the same period, and the Nasdaq has fallen further into a bear market — well over 20% lower Record closing price in November.

“The market leads the economy,” David Bailin, chief investment officer at Citi Private Bank, told Yahoo Finance. “The fact that the market is lower at this time means that consumers are slowing and the global economy is slowing.”

The stock market has suffered “serious technical losses” in recent months, with the S&P 500 falling below a significant 4,000 on Monday, John Lynch, chief investment officer at Comerica Wealth Management, noted in an email. It then tested bear market levels near 3,850 last Thursday.

“Oddly, Fed Chair Jerome Powell’s comments suggest that economic pain is likely to be in order to achieve the central bank’s goal of lowering inflation, which could be the S&P 500’s rally starting Thursday afternoon and continuing until Catalyst for Friday’s close,” Lynch wrote. “Nevertheless, we remind investors that the severe technical damage suffered over the past few months will take longer to repair.”

Investors will have more Fed speeches to consider in the coming days, including Powell’s scheduled speech on Tuesday afternoon and speeches by other central bankers scheduled for Friday.

Chris Zaccarelli, chief investment officer at the Alliance of Independent Advisers, said in a recent email: “The troubling fact is that the Fed will need to raise rates faster and to raise rates to many desired level.” “With at least four 50 basis point hikes this year, not three or fewer, we will continue to be cautious on risk assets.”

9:44AM ET: Retail sales up 0.9% in April, underscoring the strength of the U.S. consumer

U.S. retail sales rose solidly in April, pointing to continued strength in the U.S. economy, with consumer spending holding up despite stubbornly high inflation.

U.S. retail sales rose 0.9% in April, the Commerce Department said on Tuesday, driven by higher sales of autos, electronics and consumer restaurants. Economists had expected a gain of 1.0 percent, according to Bloomberg consensus data.

“American consumers have a strong appetite to spend,” Jamie Cox, managing partner at Harris Financial Group, said in a note. “Americans have broken the shackles of the coronavirus and won’t look back. Numbers like this call into question any predictions of a 2022 U.S. recession.”

9:30 a.m. ET: Stocks try to bounce back from last week’s heavy sell-off

Here’s where the major indexes will trade at the opening bell on Tuesday:

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

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

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

  • thick(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 note (^TNX): +8.7 basis points, yield 2.9640%

7:16 a.m. ET: Walmart’s Q1 earnings miss expectations while sales rise more than expected

Walmart (WMT) Mixed first-quarter resultsconsumer spending remained solid, helping boost sales for the retail giant, while earnings missed expectations.

Shares were down more than 6% in premarket trading.

The world’s largest retailer reported adjusted earnings of $1.30 per share, compared with analysts’ expectations of $1.48, according to Bloomberg consensus estimates. Revenue was $141.57 billion, versus expectations of $139.09.

Walmart’s sales growth has slowed from its peak at the height of the domestic pandemic, when a surge in food storage and stimulus checks helped boost results. Still, as demand for the company’s range of products remains resilient, the company has maintained revenue growth even as consumer prices climb across the country.

“The end result was unexpected and reflective of an unusual environment,” Walmart President and CEO Doug McMillon said in a statement. “Inflation levels in the U.S., particularly in food and fuel, have an impact on the margin mix. and operating costs are more pressure than we expected. We are aligning and balancing our customers’ need for value with the need to deliver profitable growth for the future.”

7:11 a.m. ET: Stock futures climb as investors digest retail gains

Here are the main moves in early trading ahead of Tuesday’s open:

  • S&P 500 futures (ES=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

  • thick(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 note (^TNX): 0.00 basis point yield is 2.8770%

7:03 AM ET: Home Depot climbs 4% after strong quarterly results

Shares of home improvement retailer Home Depot (HD) after a rebound in early trade on Tuesday Announcement of first quarter financial results That beat analysts’ expectations and raised the full-year outlook.

The company reported net income of $4.23 billion, or $4.09 a share, for the three months ended March 31, compared with $4.15 billion, or $3.86 a share, a year earlier. Home Depot also posted net sales of $38.9 billion in the first quarter of fiscal 2022, an increase of $1.4 billion, or 3.8%, from a year ago. Analysts had expected adjusted earnings of $3.71 per share on revenue of $36.83 billion, according to a Bloomberg consensus estimate.

“This quarter’s solid performance is even more impressive as we start the spring at a slower pace compared to last year’s historical growth,” CEO and President Ted Decker said in a statement.

The company also raised its full-year guidance, forecasting 3% sales growth and mid-single-digit earnings per share growth.

6:17 p.m. ET Monday: Stock futures little changed as markets recover slightly

Here’s where stock futures extended trading ahead of Monday’s overnight session:

  • S&P 500 futures (ES=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

  • thick(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 note (^TNX): -5.8 basis points, yield 2.8770%

NEW YORK, NY - 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 continued to worry about inflation and other global issues.  (Photo by Spencer Platt/Getty Images)

NEW YORK, NY – 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 continued to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images)

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

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