Stock Market Today: Stocks Advance as Rate-Hike Fears Subside
The major benchmarks posted broad-based gains amid speculation the central bank will hold rates steady at the next Fed Meeting.
Stocks posted broad-based gains Tuesday, helped by commentary from Federal Reserve officials downplaying the odds of another interest rate hike at the next Fed meeting.
A bullish forecast from a consumer staples bellwether and the kick off of Amazon.com's (AMZN) fall sale for Prime subscribers also helped boost risk sentiment.
In a week packed with speeches and commentary from central bank officials, Atlanta President Raphael Bostic on Tuesday sounded a dovish note toward future interest rate policy. Bostic said that rates are currently high enough to get the economy back to the Fed's 2% inflation target.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The CME FedWatch Tool currently projects an 88% chance that the central bank will hold rates steady at its next meeting, up from 72% last week and 53% one month ago," notes Argus Research.
Rapidly rising global interest rates hampered equities in the earlier part of the month, but stabilizing yields have helped markets post gains for three straight sessions.
"Equity markets have been underpinned by a reprieve in yields and crude oil prices," writes Quincy Krosby, chief global strategist for LPL Financial. "Financial markets are keenly focused on the release of key inflation-related data this week."
As to that last point, note that the September Consumer Price Index is slated for release on Thursday, Oct. 12.
In single-stock news, as mentioned earlier, Amazon kicked off its fall sale for Prime subscribers, and markets approved by adding $13 billion in value to the company's market capitalization. But the real star of Tuesday's show was Pepsico (PEP), which jumped more than 2.4% at one point on an intraday basis.
The soft drinks and snacks maker topped Wall Street's third-quarter earnings and revenue forecasts, and offered a full-year outlook toward the higher end of its outlook. Shares in PEP have been under pressure this year amid concerns over the potential impact of weight loss drugs such as Ozempic and Mounjaro on the company's business.
By the closing bell, the Dow Jones Industrial Average rose 0.4% to 33,739, while the broader S&P 500 added 0.5% to 4,358. The tech-heavy Nasdaq Composite gained 0.6% to end at 13,562.
Seasonality improves from here
The market's recent strength in face of heightened geopolitical uncertainty and rising oil prices shouldn't be too much of a surprise given that we're exiting the seasonally weakest period for equities, experts say.
"From a market standpoint, we are also entering a better period," writes Brad McMillan, chief investment officer for Commonwealth Financial Network. "While September is historically the weakest month of the year, the fourth quarter has been notably better, which may be a tailwind moving forward. The solid economic foundation and improving seasonal factors may give us better results through the end of the year."
Indeed, investors should be pleased to know that, historically, we're about to enter one of the seasonally strongest periods for equities. Have a look at the above chart, and you'll see that since 1928, the S&P 500 has delivered an average price gain of 0.9% in November, 1.3% in December and 1.2% in January, according to Yardeni Research.
Related content
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.
-
Earn Delta SkyMiles Worth Up to $1,800 with an AMEX Business Card
Delta SkyMiles and American Express offer 150,000 on business credit card for new cardholders.
By Ellen Kennedy Published
-
Stock Market Today: Markets Soar Amid Strong Earnings for Big Tech
Equities ended the week on an up note thanks to some of the market's biggest names.
By Dan Burrows Published
-
Stock Market Today: Markets Soar Amid Strong Earnings for Big Tech
Equities ended the week on an up note thanks to some of the market's biggest names.
By Dan Burrows Published
-
Stock Market Today: Markets Tumble Amid Slower Economic Growth and Rising Prices
Disappointing readings on GDP and inflation helped tank equities.
By Dan Burrows Published
-
Stock Market Today: Stocks Run Out of Steam Ahead of Meta Earnings
The Dow Jones Industrial Average snapped a four-day winning streak after Boeing's first-quarter results.
By Karee Venema Published
-
Stock Market Today: Nasdaq Soars Ahead of Tesla Earnings
The EV stock rose nearly 2% ahead of its highly anticipated Q1 earnings report, due after tonight's close.
By Karee Venema Published
-
Stock Market Today: Markets Rebound Ahead of Big Week for Earnings
Equities rallied on easing geopolitical tensions, upcoming quarterly results.
By Dan Burrows Published
-
Stock Market Today: Nasdaq Spirals as Netflix Nosedives
A big earnings boom for credit card giant American Express helped the Dow notch another win.
By Karee Venema Published
-
Stock Market Today: S&P 500, Nasdaq Extend Losing Streaks
The two indexes have closed lower for five straight sessions.
By Karee Venema Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published