Stocks finished mixed Tuesday, while the dollar hit a one-week high against its global peers in safe-haven trading and Treasury bond yields moved lower, as investors adopted a cautiously-optimistic stance ahead of retail earnings and sales data slated for the next two sessions.
A solid run of weekly gains for U.S. stocks, the best since November of last year, was extended yesterday as investors shrugged-off weak China data and slumping oil prices to add around 0.3% to the S&P 500 by the close of the session.
China's stumbling growth, linked in part to its 'zero Covid' health policies, is clipping commodity prices in markets around the world and triggering a mini-rally for the dollar, which rose to a one-week high of 106.63 against its global peers in overnight trading.
Here at home, second quarter earnings from Walmart (WMT) and Home (HD) Depot arrived before the bell, as did a key reading of July housing starts that follows a slump in homebuilders' confidence reported last night by the National Association of Home Builders.
The data is unlikely to shake confidence in the broader economy, however, with the Atlanta Fed's GDPNow forecasting tool showing third quarter growth advancing at a 2.5% clip following stronger-than-expected July jobs data and still-expanding manufacturing activity.
That optimism was evident in data from Bank of America's closely-watching Global Fund Managers' Survey, published Tuesday, which showed a big August rotation into U.S. stocks and, for the first time in two years, indicated that investors see growth stocks outperforming value stocks over the next twelve months.
Inflation concerns, however, remain at the forefront, particularly with minutes of the Fed's July policy meeting due for release on Wednesday, as bets on a 75 basis point rate hike -- the third in succession -- hold at 40.5% heading into the Fed's September decision, according to the CME Group's FedWatch.
In other markets, oil prices slumped deeper into the red in New York trading, although U.S. crude remains firmly below the $90 per barrel, following Sunday's disappointing industrial output data from China and a ramp-up in U.S. production that has domestic output pegged at around 12.2 million barrels per day.
WTI crude futures for September delivery were marked $2.88 lower at $86.53 per barrel while Brent contracts for October, the global benchmark, fell another $2.91 to $92.19 per barrel.
Benchmark 10-year Treasury note yields were pegged at 2.815% while 2-year notes were little-changed at 3.262%.
In overseas markets, Europe's Stoxx 600 closed 0.16% higher in Frankfurt while overnight in Asia the region-wide MCSI ex-Japan index fell 0.07%.
On Wall Street, the S&P 500 finished up 0.19% while the Dow Jones Industrial Average gained 242 points, or 0.71%, to 34,154, retaking the 34,000 point mark for the first time since May. The tech-focused Nasdaq slipped 0.19%.
Walmart ended up 5.1% after it posted stronger-than-expected second quarter earnings, while trimming its expected profit decline for the year, as the world's biggest retailer appears to be shifting excess inventory and benefiting from the ongoing reduction in gas prices.
Home Depot, meanwhile, rose 4.1% after it topped Street earnings estimates, while reiterating its full-year profit forecast, as the retailer saw an unexpected surge in home improvement demand amid a slowing housing market.
