Gains across a swath of stocks on Monday offset declines in big technology shares, keeping major indexes steady ahead of coming inflation data.
Monday extended a recent trend: Since a lower-than-expected inflation reading last month, investors have piled into the stocks of moderately sized companies, while cooling on the giant tech firms that had previously driven this year’s rally.
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In a day of mixed trading on Wall Street, stocks edged higher Tuesday ahead of data on U.S. inflation and a key Federal Reserve meeting later in the week.
The major U.S. indexes finished modestly higher after seesawing through the day. The Dow Jones Industrial Average climbed 155 points, or 0.6 percent, to close at 26,543, the S&P 500 gained 0.5 percent, and the Nasdaq Composite rose 0.3 percent.
Stocks have been on a roller coaster ride lately as investors shift their focus between the potential for further economic stimulus and the potential for higher inflation. The market has been rising since hitting a 10-month low on Feb. 8, and investors are now waiting for inflation data and the Federal Reserve’s policy meeting later this week.
The Consumer Price Index, a measure of inflation at the consumer level, is expected to be released on Wednesday, and the Fed’s two-day policy meeting will start Tuesday.
“Investors will be keenly attuned to any inflationary signals from the releases of the CPI and Fed policy meeting this week,” said Greg McBride, chief financial analyst at Bankrate.com.
The market’s rally in recent weeks has been fueled in part by expectations for more government stimulus after President Joe Biden unveiled a $1.9 trillion economic relief plan, including direct payments to citizens.
“Despite all the worries over rising bond yields, investors are still focused on the potential for more fiscal stimulus from the Biden administration,” McBride said.
He added that, “these efforts should continue to provide a floor for stocks even if there are bumps in the road along the way.”
In Tuesday’s trading, the lineup of 10 major S&P 500 sectors were mixed. Energy was the best-performing sector, rising 1.8 percent, while consumer defensive stocks lagged, dropping 0.2 percent.
Among individual stocks, Boeing shares jumped 8.9 percent after Southwest Airlines announced Tuesday it has accelerated an earlier plan to buy more than 200 of the company’s 737 Max jets.
In other news, Tesla rose 2.7 percent after the electric-car maker said it will expand its Supercharger network in the U.S. and Canada to add more than 20,000 charging points.
Overall, the market appears to be shrugging off concerns about higher bond yields and is instead focusing on the potential for more economic stimulus. Investors now await the inflation data and the Fed meeting later this week to get further clarity on the direction of the market and the economy.
