The Dow Jones Industrial Average rose 0.5% in early afternoon action Tuesday but was off session highs as one Federal Reserve official signaled that further rate hikes may not be necessary. The S&P 500 gained 0.7% on the stock market today, with the Nasdaq also up 0.7% after giving up some gains.
On Tuesday, Atlanta Fed President Raphael Bostic told the American Bankers' Association that the Fed may not need to raise rates further. According to the CME FedWatch Tool, the odds of a rate hike in November stand at 11.6% and at 24% before year-end.
Also on Tuesday, the International Monetary Fund saw inflation rearing up again amid the continuing Israel-Hamas war, should oil prices surge.
Volume on the New York Stock Exchange and on the Nasdaq was higher compared with the same time on Monday. The small-cap Russell 2000 index gained more than 1.5% while the Innovator IBD 50 ETF ETF advanced 1%.
Crude oil reversed recent gains and fell 1% to $85.46 a barrel. The yield on the benchmark 10-year Treasury note fell 15 basis points to 4.64%.
Dow Jones: Key Economic Data Due
The producer price index for September will be released on Wednesday. Wall Street expects a 0.3% reading after August's 0.7%, according to Econoday.
Also on Wednesday, the Fed's minutes from the September meeting will be released. The consumer price index inflation report for September follows on Thursday and is expected to show the economy cooling to 0.3% after August's steep 0.6% rise.
Late Monday, the Mortgage Bankers Association, the National Association of Home Builders and the National Association of Realtors asked for clarity on two points in a letter to the Fed.
First, they sought a signal from the Fed that the rate hikes were at an end. They also requested that the Fed not sell any of its mortgage-backed securities holdings until the housing market stabilizes and the spread between the 30-year mortgage rates and the 10-year Treasury yield returns to normal. The letter was sent as mortgage rates soared to 23-year highs.
Dow Jones Stocks, IBD 50
Among Dow Jones stocks, tech leaders continued to lag in the afternoon session. But Coca-Cola got a lift after rival PepsiCo reported third-quarter results. And JPMorgan Chase rose with earnings due on Friday. Shares are near an entry of 148.87 amid tight trading and just below the 50-day line. Other banks reporting Friday include Citigroup and Wells Fargo.
Among companies in the IBD 50, Adobe has cleared its 50-day line with an alternative buy point of 570.24. Trade Desk is nearing a buy point of 91.85. Another IBD 50 member, Modine Manufacturing, broke out from a proper entry of 49.60. Modine is today's pick for IBD 50 Growth Stocks To Watch.
From the IBD Leaderboard, Vertiv has broken out and is in a buy zone above a 40.41 entry.
Meanwhile, Pinterest is also at its entry of 28.90.
Stocks Moving Today
Higher prices helped Pepsi increase its forecasts for the fourth quarter. Sales during the third quarter grew 7% while earnings per share climbed 14%. PEP stock rose in a three-day winning streak but remains below its 50-day line.
Food and animal safety products maker Neogen pared some early losses after earnings continued to decelerate for the fifth quarter in a row, due to interest-rate-related costs and amortization expenses.
Elsewhere, Coherent surged nearly 10% on news of a $1 billion investment in its silicon carbide business. Denso and Mitsubishi Electric will fork over $500 million each and have a 12.5% noncontrolling interest in the unit. Silicon carbide is used in devices requiring huge power conversion such as drivetrains in electric vehicles.
Premium footwear company Birkenstock is set to price its initial public offering. Birkenstock will be the fourth major IPO this year, and follows debuts from Arm, Instacart and Klaviyo.
Market Rally Faces Resistance; Tesla, Nvidia Offer New Entries
Unity Moves On CEO Departure
Video game developer Unity Software pared some gains but remained up more than 2% a day after Chief Executive John Riccitiello announced his retirement. Unity had been testing certain pricing models earlier that did not go down well with developers.
Palantir held some early gains in the afternoon session. The cybersecurity software maker won an artificial intelligence contract with the U.S. Army valued at as much as $250 million. Shares are in a cup base with a buy point of 20.24. Meanwhile, Pager Duty recovered some of its losses after it announced a $350 million private placement of senior convertible notes.
Hotelier Hyatt gapped up as it prepares to join the S&P MidCap 400 Index on Thursday. Shares are retaking the 50-day line.
In health care, Akero Therapeutics plunged more than 50% after findings of its study failed to meet its primary goal of treating liver fibrosis. But the results showed statistically significant improvements in NASH symptoms.
Finally, Tesla was up nearly 2% even after analysts at UBS lowered the price target to 266 from 290. Jefferies gave the electric-vehicle leader a lower target of 250, down from 265.
Weak sales in China amid continuing price cuts are likely to result in thinning margins for the third quarter. Tesla reports earnings on Oct. 18 and is in a cup with handle with a buy point of 278.98. Tesla is the latest addition to Leaderboard.
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