Stocks rise as investors value Fedspeak

U.S. stocks rose at Tuesday’s open as Wall Street processed hawkish rate talk from Federal Reserve officials and pondered remarks by Chairman Jerome Powell at an event hosted by Sweden’s central bank.

The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) each rose 0.2% in early trading. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3%.

Powell made the case for U.S. central bank independence in a speech Tuesday at the Central Bank Independence Symposium in Stockholm, Sweden. He argued that stable inflation is the foundation of a healthy economy and can compel the Fed to take necessary actions, even if they are often unpopular.

“The case for monetary policy independence lies in the benefits of isolating monetary policy decisions from short-term political considerations,” he said.

In specific market moves, Coinbase (COIN) shares rose 4% on the open after the cryptocurrency exchange announced it would cut nearly 1,000 jobs as part of a plan of restructuring. The company expects to incur approximately $149 million to $163 million in restructuring expenses. The move will mark the third round of layoffs for Coinbase since last year.

Shares of billionaire Richard Branson’s Virgin Orbit Holdings (VORB) plunged 20% after one of the company’s rockets failed to reach its target orbit due to a technical failure.

Investors continued to watch beleaguered retailer Bed Bath & Beyond (BBBY) as it reported earnings that missed estimates, just a week after it revealed the company was considering bankruptcy due to financial difficulties.

“As we shared last week, we continue to work with advisors as we consider all strategic alternatives to achieve our short and long-term goals,” CEO Sue Gove said in an update Tuesday. , adding that “multiple avenues are being explored”.

Shares of Bumble (BMBL) rose more than 4% in early trading after KeyBanc upgraded the women-founded dating app from Sector Weight to Overweight and said “competitive environment appears stable and economic pressures ease”.

Shares of Oak Street Health (OSH) soared 29% after Bloomberg News reported on Monday that CVS Health was considering an acquisition of the operator of primary care centers.

NEW YORK, NEW YORK - JANUARY 09: Traders work on the floor of the New York Stock Exchange during afternoon trading on January 09, 2023 in New York City.  The stock market closed with mixed results after opening on a positive note with the Dow Jones and S&P 500 both closing on losses and the Nasdaq closing with a second day of gains.  (Photo by Michael M. Santiago/Getty Images)

Traders work on the floor of the New York Stock Exchange during afternoon trading January 09, 2023 in New York City. (Photo by Michael M. Santiago/Getty Images)

Tuesday’s moves come after a mixed start to the week that saw the tech-heavy Nasdaq extend gains from a rally on Friday while the other two major averages failed to sustain momentum. The Nasdaq rose 0.6% on Monday, while the S&P 500 and Dow each closed down 0.1% and 0.3%, respectively, following hawkish remarks from two Federal Reserve officials. .

San Francisco Fed President Mary Daly said in a live interview with The Wall Street Journal that she expects policymakers to raise interest rates to somewhere above 5%, while adding that the final rate will ultimately depend on the path of inflation.

Echoing that view, Atlanta Federal Reserve Chairman Raphael Bostic also said the U.S. central bank is expected to raise interest rates above 5% at the start of the second quarter and then interest rates. keep it there for “a long time”.

“I’m not a pivot guy,” Bostic said during an address to the Rotary Club of Atlanta on Monday. “I think we should take a break and stick with it, and let politics work.”

Thursday will bring investors the Consumer Price Index (CPI) for December – perhaps the most important economic release of the month and the last significant reading ahead of the January 31-February 31 meeting of Federal Reserve officials. 1 to make their next interest rate hike.

Economists expect the headline CPI to have risen 6.6% from a year earlier in December, down from the 7.1% increase seen in November, data showed. Bloomberg. On a month-to-month basis, the CPI probably remained stable.

The report is likely to influence bets on whether the Federal Reserve will raise interest rates by 0.25% or 0.50% early next month.

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

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