Summary:
Wall Street had a positive session on Tuesday amid FOMC meeting expectations.
Russell 2000 index surged 1.3%, targeting its highest close since August.
August retail sales surprised with a 0.1% increase, reducing aggressive rate cut chances.
Bitcoin (BTC/USD) jumped over 4%, driven by positive ETF inflows.
Oil prices increased by 1.3% due to escalating geopolitical tensions.
Wall Street witnessed a slightly positive session on Tuesday, driven by investor optimism as the Federal Open Market Committee (FOMC) commenced its two-day meeting, anticipated to announce the first interest rate cut in over four years on Wednesday.
The Russell 2000 index shone brightly, surging 1.3%, aiming for its highest close since early August, and outperforming larger-cap indices. Solar, clean energy, and regional banks led the charge, with traders eyeing sectors likely to benefit from lower interest rates.
On the macroeconomic front, August retail sales surprised on the upside, registering a 0.1% month-over-month increase, contrary to the expected 0.2% decline. This unexpected boost slightly reduced the likelihood of a more aggressive 50-basis-point rate cut, with market-implied probabilities slipping from 67% to 63%.
Short-dated Treasury yields rose as expectations for a substantial rate cut moderated, while the US dollar strengthened, gaining 0.2%. In commodities, gold retreated 0.7% from Monday’s record close, while oil prices increased by 1.3% amid escalating geopolitical tensions in the Middle East.
Reports of a coordinated attack in Lebanon have surfaced, leading to numerous casualties among Hezbollah militants. Additionally, Iran’s ambassador to Lebanon was reportedly injured, although the official responsibility for the attack remains unclaimed.
In the cryptocurrency market, Bitcoin (BTC/USD) jumped over 4%, buoyed by positive ETF inflows, signaling renewed investor interest in the digital asset space as interest rates shift.
Tuesday’s Performance In Major US Indices, ETFs
| Major Indices | Price | 1-day %chg | |--------------------------------------|------------|-------------| | Russell 2000 | 2,220.44 | 1.3% | | S&P 500 | 5,642.79 | 0.2% | | Nasdaq 100 | 19,441.83 | 0.1% | | Dow Jones | 41,636.05 | 0.0% |
Updated at 12:38 p.m. ET
According to Benzinga Pro:
- The SPDR S&P 500 ETF Trust (SPY) was 0.1% higher at $563.44.
- The SPDR Dow Jones Industrial Average (DIA) inched 0.1% up to $417.61.
- The tech-heavy Invesco QQQ Trust Series (QQQ) also rose 0.1% to $473.60.
- The iShares Russell 2000 ETF (IWM) climbed 1.2% to $220.28.
- The Energy Select Sector SPDR Fund (XLE) outperformed, up 1.2%, while the Health Care Select Sector SPDR Fund (XLV) lagged, down 0.9%.
Tuesday’s Stock Movers
- Moderna Inc. (MRNA) surged over 6% after receiving approval from Health Canada for its updated COVID-19 vaccine.
- GE Vernova Inc. (GEV) climbed 3.5% following an upgrade from Bank of America.
- Hewlett Packard Enterprise Co (HPE) advanced nearly 5% after a similar upgrade from Bank of America.
Image created using artificial intelligence MidJourney.
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