U.S. stocks rose on Tuesday, extending gains from the previous session amid growing optimism about interest rate cuts, as retail sales failed to grow in June.
At 09:35 ET (13:35 GMT), the S&P 500 was up 235 points, or 0.6%, up 18 points, or 0.3%, and gaining 70 points, or 0.4%.
Retail Sales Flat in June; Rate Cut Optimism Grows
U.S. consumer prices were unchanged in June on a monthly basis, data released earlier Tuesday showed, following an upwardly revised 0.3% gain in May.
The release was stronger than the expected 0.3% decline, after a 0.1% rise in May, but the sales outlook remains challenging as households become increasingly price sensitive and focus on basic needs, with interest rates remaining high.
Optimism is growing that the Federal Reserve will begin its interest rate cutting cycle in September.
Federal Reserve Chairman Jerome Powell said recent inflation readings have boosted the bank’s confidence in low inflation, raising bets that the central bank is getting closer to cutting interest rates.
Powell had previously indicated that the Fed does not have to wait for inflation to reach 2% before cutting interest rates.
Traders now see an 89% chance that the central bank will cut interest rates by 25 basis points in September, with a slim chance of a 50 basis point cut, according to .
Trump picks running mate after shooting boosts presidential chances
Wall Street largely shrugged off any political uncertainty caused by the attempted assassination of Trump at a rally in Pennsylvania over the weekend.
Trump was formally nominated Monday as the leading Republican presidential candidate for the 2024 election, and named Ohio Sen. J.D. Vance as his running mate.
Trump’s chances of winning have increased sharply since last weekend’s shooting, as a Trump presidency offers the prospect of a more flexible regulatory environment in the country.
More focus on bank profits
The banking sector remained in the spotlight Tuesday, with Bank of America (NYSE:) shares rising about 3% after the lender reported second-quarter revenue and earnings that beat expectations as investment banking and asset management fees rose.
In contrast, Morgan Stanley (New York Stock Exchange:) and Charles Schwab (NYSE:) Both fell after failing to meet high expectations.
Shares of Match Group (NASDAQ:) rose more than 6% after a report that activist investor Starboard had a stake of more than 6.5% in the Tinder-owner and was pushing for a potential sale if the turnaround didn’t work out.
Trump Media and Technology Group (NASDAQ:) stock fell 8%, retreating from closing up 31% the day before amid a broader rally in the so-called Trump trade across markets.
Crude oil is heading down
Crude oil prices fell on Tuesday, amid continued concerns about a slowdown in the Chinese economy.
By 09:35 ET, U.S. West Texas Intermediate (WTI) crude futures were down 1.7% at $79.48 a barrel, while Brent crude was down 1.6% at $83.53 a barrel.
The world’s second-largest economy and top importer of crude oil posted its weakest growth since the first quarter of 2023,
The latest inventory forecast from the US Crude Oil Board is due later in the session.
(Ambar Warrick contributed to this article.)
