© Reuters. A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 7, 2024. REUTERS/Brendan McDermid
By Bansari Mayur Kamdar and Shashwat Chauhan
(Reuters) -The tech-heavy Nasdaq drove Wall Street higher on Tuesday, as traders held on to bets of interest-rate cuts by the Federal Reserve in the coming months, even as consumer prices data came in slightly hotter than expected.
A Labor Department report showed U.S. consumer prices increased in February amid higher gasoline and shelter costs.
The Consumer Price Index (CPI) rose 0.4% last month after climbing 0.3% in January. Excluding volatile food and energy components, consumer prices increased 0.4% in February after rising by the same margin in January.
“Inflation came in a little hot, but the bulls aren’t ready to throw in the towel yet,” said David Russell, global head of market strategy at TradeStation.
“Investors remain optimistic that shelter costs will come down. We still have three more reports before that key Fed meeting in June to confirm or reverse that hope.”
Traders are now seeing a 70% chance of the first rate cut coming in June, according to the CME FedWatch Tool, from 71% ahead of the inflation report.
Last month’s stock market rally was slowed after data showed signs of a robust economy and sticky inflation, as traders pushed back expectations on the timing of the Fed’s first rate cut to June from March.
Producer prices data is on tap later this week and will provide further insight into inflation.
At 11:35 a.m. ET, the was up 217.15 points, or 0.56%, at 38,986.81, the was up 49.33 points, or 0.96%, at 5,167.27, and the was up 217.75 points, or 1.36%, at 16,237.02.
Eight of the 11 major S&P 500 sectors rose, with rate-sensitive technology stocks leading gains at 2.0%.
Chip stocks snapped a two-day losing streak and rose 1.7%, with AI darling Nvidia (NASDAQ:) jumping 5.9%.
Megacap growth peer Meta Platforms (NASDAQ:) added 3.4%.
Oracle (NYSE:) jumped 11.2% on signs the firm was making progress in its plan to grab a share of the cloud-computing market, thanks to its tie-up with AI chip giant Nvidia.
Boeing (NYSE:) shed 3.5% after a report said an audit by the Federal Aviation Administration found dozens of problems with the 737 MAX’s production.
Southwest Airlines (NYSE:) dipped 14.4% after saying it expects a 42% drop in MAX deliveries this year from Boeing than previously estimated, which will likely result in a cut in its 2024 capacity.
3M climbed 4.2% after the industrial conglomerate said William Brown would be appointed its chief executive officer, effective May 1.
Advancing issues outnumbered decliners by a 1.24-to-1 ratio on the NYSE and by a 1.01-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and no new lows, while the Nasdaq recorded 35 new highs and 77 new lows.
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