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Stocks rise as investors rate Fedspeak

Stocks rise as investors rate Fedspeak
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US stocks crept higher on Tuesday as Wall Street processed and considered talks by Federal Reserve officials about tightening interest rates Comments by Chairman Jerome Powell at an event hosted by the Swedish Central Bank.

The S&P 500 (^GSPC) and Dow Jones Industrial Average (^ DJI) were each up a modest 0.2% in afternoon trade, after rising at the open and then briefly turning negative in a back-and-forth week. The tech-heavy Nasdaq Composite (^IXIC) rose by 0.5%.

Powell reiterated the importance of stable inflation in a speech at Tuesday’s symposium on central bank independence in Stockholm, Sweden, adding that aligning rates could force the Fed to take necessary measures, even if they are often unpopular.

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

Elsewhere in a busy week from Fedspeak, Federal Reserve Gov. Michelle Bowman claimed on Tuesday that there was still more work to be done He is fighting inflation despite recent improvements in data and said the Fed will continue raising interest rates to meet its long-term price stability target of 2%.

“I am committed to taking additional action to bring inflation back to our target,” Bowman said at the Florida Bankers Association Executive Dinner in Miami, Florida.

During certain market movements, shares of Coinbase (COIN) rose 4.9% after the cryptocurrency exchange made the announcement cut nearly 1,000 jobs as part of a restructuring plan. The company anticipates restructuring costs of approximately $149 million to $163 million. The move marks the third round of layoffs for Coinbase since last year.

Shares in Billionaire Richard Branson’s Virgin Orbit Holdings (prep) then crashed by 10% One of the company’s missiles failed to reach it its target orbit due to a technical failure in a much-anticipated space mission.

Investors continued to watch shares of struggling retailer Bed Bath & Beyond (BBBY) as it reported earnings that missed estimates just a week after it was revealed the company was considering bankruptcy due to its financial woes. Meme stock is up nearly 20% on Tuesday after climbing 24% on Monday.

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

bumble (BMBL) shares were up 5% in early trade after KeyBanc upgraded the women-founded dating app from Sector Weight to Overweight, saying that “the competitive environment appears to be stable and economic pressures are easing.”

Oak Street Health (Osh) shares rose 28% afterwards Bloomberg News reported on Monday that CVS Health is considering an acquisition of the primary care center operator.

NEW YORK, NEW YORK - JANUARY 9: Traders work on the floor of the New York Stock Exchange during afternoon trading on January 9, 2023 in New York City.  The stock market ended with mixed results after opening on high, with the Dow Jones and S&P 500 both ending with losses and the Nasdaq ending 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 trade on 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, which saw the tech-heavy Nasdaq extend gains from a rally on Friday while the other two major moving averages failed to maintain momentum. The Nasdaq rose 0.6% on Monday, while the S&P 500 and Dow closed down 0.1% and 0.3%, respectively, after two Federal Reserve officials made aggressive comments.

San Francisco Fed Chairwoman Mary Daly said during a live-streamed interview with the Wall Street Journal that she was expecting policymakers will raise interest rates to just over 5%while adding that the ultimate rate will ultimately depend on the path of inflation.

Atlanta Federal Reserve Chairman Raphael Bostic echoed this view and said the Federal Reserve should do so Increase in interest rates to over 5% Drop in early in Q2 and then keep them there “for a long time”.

“I’m not a pivot guy,” Bostic said Monday in a speech to the Atlanta Rotary Club. “I think we should stop and stay there and let politics sink in.”

On Thursday, investors will be presented with December’s Consumer Price Index (CPI) – perhaps the most important economic news release of the month and the last significant reading before Federal Reserve officials on Feb 27-31 1 to deliver their next rate hike.

Economists expect December headline CPI to rise 6.6% yoy, a Downgrade from November’s 7.1% gain, according to data from Bloomberg. On a month-to-month basis, the CPI was likely unchanged.

The report is likely to affect bets on whether the Federal Reserve will hike 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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