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Stocks pushed higher again on Tuesday, adding to gains posted the previous day, as concerns about the banking sector continued to ease. Attention now focuses on the Federal Reserve’s interest rate decision, set to be announced on Wednesday.
The Nasdaq Composite (COMP.IND) closed +1.0%, S&P 500 (SP500) finished +1.3% and Dow (DJI) ended +1.6%.
“Stocks were higher in thin trading on Tuesday as markets await Wednesday’s [Fed] meeting. The Fed is between a rock and a hard place as the recent banking turmoil is a reason to pause, while inflation data supports another at least 25 basis point rate hike,” analyst Andrew Hecht told Seeking Alpha. “The central bank may be in a no-win position.”
Hecht added: “Expect the Fed to walk on a balance beam; a rate hike with a dovish statement or a pause with more hawkish language could be the best bet for tomorrow’s action.”
In the fixed-income market, yields rose again, further moderating the sharp declines seen lasts week. The 10-year Treasury yield (US10Y) rose 12 basis points to 3.60% and the 2-year yield (US2Y) surged 25 basis points to 4.17%.
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