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Stock market news live updates: Stocks rebound as Nasdaq powers on for second straight day and Dow gains 180 points

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  • ^GSPC
  • ^IXIC
  • NQ=F
  • CL=F
  • ^DJI
  • ES=F

Wall Street’s main indexes closed in the green on Tuesday after staging a comeback from earlier losses as investors weighed testimony from Federal Reserve Chair Jerome Powell.

The Nasdaq rallied for the second consecutive session to close 1.4% higher at 15,153.45, while the Dow jumped 180 points. The S&P 500 also clawed back from a morning drop to close in positive territory.

Federal Reserve Chairman Jerome Powell told Congress in his confirmation testimony on Tuesday that if the pace of price increases fails to slow, the central bank will get more aggressive with raising short-term borrowing costs.

“If we see inflation persisting at high levels, longer than expected, if we have to raise interest rates more over time, then we will,” Powell said at a hearing before the Senate Banking Committee.

"Investors in the equity markets are assuming that inflation comes down to at least a low enough level to not bother stocks that much," ProShares global investment strategist Simeon Hyman told Yahoo Finance Live. "But the Fed's activity you need to split into two pieces."

"Before you get to rate hikes, you have to talk about tapering and the new news of the last 10 days — an accelerated unwind of the balance sheet," he added, indicating this could determine longer-term rates to rise regardless of whether inflation comes down and independent of the Fed's speed on raising rates.

"Ultimately, those actions might mean there don't have to be too many rate hikes,"Hyman said.

The central bank’s monetary policy will remain in focus this week, with the Bureau of Labor Statistics' (BLS) latest Consumer Price Index (CPI) in the spotlight as investors continue to gauge inflationary pressures and the Fed’s potential response.

Another red-hot read on the latest number is expected, with economists forecasting a print of 7.1% in December based on Bloomberg consensus data, up even more from November's 6.8% year-over-year clip.

Worries over sooner-than-expected interest rate increases have tempered investors’ optimism heading into the new year, placing equity markets in a risk-off mood so far in 2022. Meanwhile, Treasury yields have climbed, with the benchmark 10-year yield near 1.8%, its highest level since January 2020.

“We’re seeing across the board a re-rating of what the Federal Reserve will do,” Steven Wieting, global chief investment strategist at Citi Private Bank told Yahoo Finance Live.

“The likelihood is very clear that the Fed will succeed in sinking inflation,” Wieting said. “That was going to happen one way or the other and we are just trying to gather how actively the Fed will be doing that.”

Goldman Sachs, Evercore ISI, and Deutsche Bank are now among Fed watchers repricing the Federal Reserve’s pace on rate hikes. The firms recently predicted short-term interest rates will be 100 basis points higher by the end of 2022 than where they are now.

“We revise our Fed outlook again given plummeting unemployment, strong wages, and anticipation of another hot inflation print,” said Evercore ISI’s Krishna Guha in a note.

In an interview with CNBC on Monday, JPMorgan Chief Executive Officer Jamie Dimon said he hoped for a “soft landing,” by the central bank as it gets ready to begin raising its benchmark federal funds rate in March.

“It’s going to be a little bit like threading a needle,” said Dimon, though adding that it was possible inflation is worse than the Fed believes and rates could be increased more than currently anticipated.

NEW YORK, NEW YORK - JANUARY 07: Traders work on the floor of the New York Stock Exchange (NYSE) on January 07, 2022 in New York City. Markets fell slightly in morning trading as investors reacted to a government jobs report showing that the U.S. economy added far fewer jobs than expected in December.  (Photo by Spencer Platt/Getty Images)
NEW YORK, NEW YORK - JANUARY 07: Traders work on the floor of the New York Stock Exchange (NYSE) on January 07, 2022 in New York City. Markets fell slightly in morning trading as investors reacted to a government jobs report showing that the U.S. economy added far fewer jobs than expected in December. (Photo by Spencer Platt/Getty Images)

“I’d personally be surprised if it’s just four increases,” Dimon said. “Four increases of 25 basis points is a very, very little amount, and very easy for the economy to absorb.”

Bank earnings are also underway, with BlackRock (BLK), Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) set to report fourth-quarter results before market open on Friday.

4:00 p.m. ET: Stocks end in positive territory after snapping losing streak

Here's how the major indexes rounded out Tuesday's trading session:

  • S&P 500 (^GSPC): +42.81 (+0.92%) to 4,713.10

  • Dow (^DJI): +182.89 (+0.51%) to 36,251.76

  • Nasdaq (^IXIC): +210.62 (+1.41%) to 15,153.45

  • Crude (CL=F): +$3.18 (+4.06%) to $81.41 a barrel

  • Gold (GC=F): +$23.20 (+1.29%) to $1,822.00 per ounce

  • 10-year Treasury (^TNX): -3.4 bps to yield 1.7460%

11:27 a.m. ET: S&P 500 recoups earlier losses, Nasdaq climbs to session high

Here were the main moves in markets as of 11:27 a.m. ET:

  • S&P 500 (^GSPC): +9.53 (+0.20%) to 4,679.82

  • Dow (^DJI): -50.71 (-0.14%) to 36,018.16

  • Nasdaq (^IXIC): +112.41 (+0.75%) to 15,055.24

  • Crude (CL=F): +$2.64 (+3.37%) to $80.87 a barrel

  • Gold (GC=F): +$14.70 (+0.82%) to $1,813.50 per ounce

  • 10-year Treasury (^TNX): -1.2 bps to yield 1.7680%

11:13 a.m. ET: U.S.-listed Chinese stocks rally following upbeat trade talks

Chinese stocks in the U.S. surged as officials vowed to stabilize trade and called on financial institutions to further boost credit support to companies, according to Bloomberg.

The Nasdaq Golden Dragon China Index (^HXC) rose as much as 4.7% in morning trading after declining over 45% over the past year, per Bloomberg data.

Large-cap Chinese tech stocks saw the biggest moves: Alibaba (BABA) was up 3.74% to $133.10 per share, JD.com (JD) soared 8.83% to $75.75 per share, Pinduoduo (PDD) was up 6.91% to $60.93 per share, and DiDi (DIDI) gained 5.34% to trade at $4.73. 

11:00 a.m. ET: Stocks falter amid inflation talk at Powell testimony

Federal Reserve Chair Jerome Powell said the central bank would raise interest rates more over time if needed to tame soaring price levels as he responded to questions during his confirmation hearing before the Senate Banking Committee.

“We will use our tools to get inflation back," he told policymakers.

The Dow Jones Industrial Average dropped more than 250 points in early trading, while the S&P 500 and Nasdaq also ticked lower, losing steam after staging a comeback Monday afternoon. 

10:28 a.m. ET: Intel taps Micron exec for CFO role

Intel (INTC) analysts gave a nod of approval to the chipmaker on its move to recruit Micron’s (MU) David Zinsner to serve as chief financial officer as part of a broader shakeup by CEO Pat Gelsinger. 

"Intel now has a 'dream team,' with 'one of the best CEOs and one of the best CFOs in the semiconductor industry,'" Citi analysts said. Zinsner "has driven higher operating margins at every public company he has been CFO at."

Still, challenges remain for Intel as it struggles with manufacturing delays and market-share losses.

Shares of Micron fell as much as 1.3% and were down 0.80% to $93.14 a piece as of 10:28 a.m. Intel edged 0.71% higher to $55.60 per share. 

9:30 a.m. ET: Markets struggle for direction after Monday's tech rebound

Here's how U.S. stocks fared at market open:

  • S&P 500 (^GSPC): -0.07 (-0.00%) to 4,670.22

  • Dow (^DJI): +21.91 (+0.06%) to 36,090.78

  • Nasdaq (^IXIC): +6.93 (+0.05%) to 14,942.83

  • Crude (CL=F): +$1.53 (+1.96%) to $79.76 a barrel

  • Gold (GC=F): +$2.90 (+0.16%) to $1,801.70 per ounce

  • 10-year Treasury (^TNX): -0.2 bps to yield 1.7780%

7:35 a.m. ET: Small business confidence sees modest uptick

U.S. small business sentiment saw a slight increase in December, even amid a backdrop of growing inflation worries and labor shortages.

The National Federation of Independent Business reported that its Small Business Optimism Index rose 0.5 point to 98.9 last month. Of small business owners who responded to the organizations survey, 22% said inflation was their primary operating concern — up from 18% in November.

Despite concerns over inflation, at 57% of respondents, 2% fewer business owners from the prior month reported plans to raise prices, and the proportion of mom- and pop- operators planing to do so fell five points to 49%.

On the employment front, 49% of owners said they had job openings that could not be filled, up one point from November.

7:00 a.m. ET: Markets look to extend comeback as futures tick higher

Here were the main moves in markets ahead of Tuesday's open:

  • S&P 500 futures (ES=F): +15.50 points (+0.33%), to 4,677.75

  • Dow futures (YM=F): +78.00 points (+0.22%), to 36,030.00

  • Nasdaq futures (NQ=F): +70.25 points (+0.45%) to 15,678.25

  • Crude (CL=F): +$0.25 (+0.32%) to $78.48 a barrel

  • Gold (GC=F): +$1.20 (+0.07%) to $1,800.00 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.78%

6:02 p.m. Monday ET: Stock futures remain unchanged after choppy session

Here’s where markets were trading ahead of the overnight session on Monday:

  • S&P 500 futures (ES=F): +1.50 points (+0.03%), to 4,663.75

  • Dow futures (YM=F): -6.00 points (-0.02%), to 35,946.00

  • Nasdaq futures (NQ=F): +6.25 points (+0.04%) to 15,614.25

  • Crude (CL=F): +$0.25 (+0.32%) to $78.48 a barrel

  • Gold (GC=F): +$1.20 (+0.07%) to $1,800.00 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.78%

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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