By Stephen Culp
NEW YORK (Reuters) – Wall Street advanced to two-week highs on Monday with few impediments to thwart a three-day winning streak as investors awaited crucial inflation data.
All three major U.S. stock indexes appeared set to notch their fourth straight session of gains in a broad rally which evenly favored growth and value stocks.
“There are no real catalysts today to my knowledge,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “I thought the market would be flat to down, because there’s a lot riding on CPI.”
The Labor Department’s consumer price index (CPI), expected before Tuesday’s opening bell, is this week’s main event, and will be scrutinized for any clues regarding the length and severity of the Federal Reserve’s policy tightening phase.
On Thursday, Fed Chair Jerome Powell affirmed the central bank remains “strongly committed” to tackling decades-high inflation, and that they would “keep at it until the job is done.”
Economists polled by Reuters expect monthly CPI to have contracted 0.1% in August, edging down to 8.1% year-on-year, mainly due to the recent cool-down of commodity prices.
Financial markets have currently priced in a 92% probability that the Federal Open Markets Committee (FOMC) will implement its third straight 75-basis-point interest rate hike at the conclusion of next week’s policy meeting, according to CME’s FedWatch tool.
“(The market has) pretty much got a 75 basis-point (interest) rate hike baked in,” Tuz added. “It would take a monumental event to swing that up or down.”
The Dow Jones Industrial Average rose 212.19 points, or 0.66%, to 32,363.9, the S&P 500 gained 39.58 points, or 0.97%, to 4,106.94 and the Nasdaq Composite added 137.49 points, or 1.14%, to 12,249.80.
All 11 major sectors of the S&P 500 were green, with tech enjoying the biggest percentage gain, followed by energy companies.
Economically sensitive transports were outperforming the broader market.
Shares of Apple Inc, beaten up this year, jumped 4.2% days after the gadget maker unveiled updates to its iPhone and Apple Watch.
Drugmaker Bristol-Myers Squibb surged 4.9% following the Food and Drug Administration’s approval of its psoriasis drug late on Friday.
Rival Amgen Inc, maker of psoriasis drug Otezla, dropped 3.6%.
Twitter Inc slipped 2.0% amid its legal wrangling against Tesla Inc chief Elon Musk for scrapping a deal to acquire the social media platform.
KFC and Pizza hut operator Yum Brands Inc advanced 1.0% in the wake of its $2 billion share buyback announcement.
Car selling platform Carvana Co hopped 13.1% higher following Piper Sandler’s upgrade of the stock to “overweight.”
Advancing issues outnumbered declining ones on the NYSE by a 3.73-to-1 ratio; on Nasdaq, a 1.93-to-1 ratio favored advancers.
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 33 new highs and 52 new lows.
(Reporting by Stephen Culp in New York; Editing by Matthew Lewis)