The New York Stock Exchange ended in the green on Tuesday, defying geopolitical uncertainties and rising oil prices, as investors turned their attention to the Federal Reserve meeting.
The Dow Jones gained 0.83%, the Nasdaq index advanced by 1.22%, and the broader S&P 500 index rose by 1.01%. “The markets continue their rebound today, even as attacks escalate in the Middle East,” noted Jose Torres of Interactive Brokers.
Oil prices once again ended higher, continuing their volatile run amid supply disruptions. Since the start of the war in the Middle East, the surge in oil prices has led to a decline in stock indices, with investors expressing concerns about the economic consequences of the conflict.
“But like yesterday (Monday), we are in a rebound wave, perhaps technical,” summarized Frederic Rozier, portfolio manager for Mirabaud Private Bank. “Market participants, however, seem reluctant to take too audacious positions ahead of the Federal Reserve’s decision on rates tomorrow,” noted analysts at Briefing.com.
The New York market largely expects rates to remain within their current range, between 3.50% and 3.75%. In its projections, the institution is expected to address “the issue of war, and the risks of inflation acceleration with the rise in oil prices,” anticipated Peter Cardillo of Spartan Capital Securities before the AFP.
Prior to the initial strikes by Israel and the United States in Iran, investors were anticipating a rate cut in June or July. They now bet on October at the earliest, according to the CME FedWatch monitoring tool.
On the bond market, the yield on the ten-year US government bonds eased to 4.20% around 8:10 pm GMT, compared to 4.22% at the previous close. It stood at 3.94% before the initial Israeli-American strikes in Iran.
In terms of stock values, American airline Delta Air Lines (+6.55% at $64.82) was sought after raising its forecasts for the current quarter, despite the sharp increase in jet fuel prices with the war in the Middle East. In March alone, the additional cost for fuel was estimated at $400 million by the company.
Boeing fell by 1.23% to $210.83. Its CFO indicated on Tuesday that the acquisition of its former supplier Spirit Aerosystems weighs on the margins of its Commercial Aviation branch, which is not expected to return to profit until 2027 instead of the current fiscal year.
Electronic components specialist Qualcomm gained 1.70% to $131.59 after announcing a $20 billion share buyback program and a dividend increase for shareholders.
Semiconductor giant Micron rose by 4.50% to $461.69 ahead of its Wednesday earnings announcement. American department store chain Macy’s (-0.88% at $16.94) is also set to report its performance on the same day.
