The stock market was sitting near all-time highs Tuesday after marching upward over the past week, as upbeat investor sentiment continued to allay broader fears over inflation and the prospect of interest rate increases.
Futures for the Dow Jones Industrial Average indicated an open 25 points lower, after the index climbed 104 points Monday to close at 36,432. Futures for the S&P 500 signaled a similar start, while the Nasdaq was on track to open higher. All three indexes ended Monday at fresh records.
The S&P 500 notched its eighth consecutive session of record closes Monday as investors cheered after Congress passed a $1.2 trillion infrastructure bill following months of debate. The prospect of a wave of spending in construction and other sectors helped markets look past more macro concerns such as inflation and the prospect of interest-rate increases sooner rather than later.
The S&P 500’s eight-day winning streak marks the hottest tear since April 2019, and a ninth day ending in the green would be the longest period of consecutive gains since November 2004, according to data from Deutsche Bank.
“All these records for various equity indices might seem jarring when you consider that there are still strong inflationary pressures in the pipeline, and with them the prospect of a renewed hawkish shift by central banks,” said Jim Reid, a strategist at Deutsche Bank.
“However, the prevalent view among economists (which continues to influence investors) remains that those pressures will prove transitory and we’ll see price pressures diminish as we move through next year, hence enabling a steady liftoff in rates from central banks,” Reid said.
In the day ahead, the U.S. producer-price index (PPI) for October will capture the economic data spotlight. Economists expect PPI for last month to rise 0.6%, up from 0.5% in September.
“U.S. central bank officials will certainly be hoping that U.S. PPI will finally start to show signs of topping out given the increases seen since the start of the year,” noted Michael Hewson, an analyst at broker CMC Markets.
PPI is often a leading indicator for the consumer-price index (CPI), a key measure of inflation, which is also expected to rise when October CPI numbers print Wednesday.
In cryptocurrency markets, the two largest digital assets pushed to all-time highs Tuesday. Bitcoin topped $68,525, according to price data from CoinDesk, while Ether —the token that underpins the Ethereum blockchain network—rose to just shy of $4,840 in a second day of notching records.
Here are three stocks on the move Tuesday
Pharmaceutical company Bayer (BAYN.Germany) rose 2.4% in Frankfurt, after reporting third-quarter earnings per share (EPS) of €1.05 ($1.22), above expectations of €0.89.
New Relic (NEWR) shot up 21% in U.S. premarket trading, after posting earnings following the close Monday. The data analytics company reported an EPS loss of 10 cents on revenue of $196 million, beating expectations of a 13 cents per share loss from revenue of $182 million.
Roblox (RBLX) shot up 22% in the premarket. The platform offering tools for users to design and interact in the metaverse, or virtual worlds, reported strong results Monday, with bookings up 28% year-over-year.
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