US stocks rallied on Tuesday and the S&P 500 ended a three-day losing streak, as a further drop in prices oil prices and a lower-than-expected rise in producer prices helped ease investors’ jitters over inflation.
Attention turned to the upcoming Federal Reserve monetary policy announcement (fed).
The Dow Jones Industrial Average rose 599.1 points, or 1.82%, to 33,544.34 units, while the S&P 500 it gained 89.34 points, or 2.14%, to 4,262.45 units. The Nasdaq Composite added 367.40 points, or 2.92%, to 12,948.62 units.
The S&P 500 had fallen 2.4% in the previous three sessions and recently joined the Dow-Jonesthe nasdaq and the Russell 2000 in the formation of a “death cross” technical pattern, when a short-term moving average crosses below a long-term one, which some investors believe indicates more short-term weakness.
Brent crude closed below $100 a barrel, after rising to above $139 last week, which was a relief to equity investors who have seen stocks come under pressure this year. by growing concerns about inflation and uncertainty about the path of the Fed’s monetary policy.
The US producer prices They rose sharply in February, due to a rise in gasoline, and further increases are expected after the Russian invasion of Ukraine, which has made crude oil and other raw materials more expensive.
Still, data for the 12 months to February matched expectations for a 10% increase, while the producer price index for final demand in monthly terms rose 0.8%, just below the forecast of the 0.9% and less than the 1.2% increase in January.
The market is pricing in a rate hike of at least 25 basis points when the central bank delivers its policy statement on Wednesday. Investors will also keep a close eye on the Fed’s forecasts for the path of rates this year and the next to curb inflation.
The chairman of the Fed, Jerome Powellhas recently raised multiple rate hikes this year.
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