US close: Stocks rise after more dovish Fed remarks

(Sharecast News) - US stocks gained on Tuesday as bond yields tumbled on the back of yet more indications from the Federal Reserve that they are in no rush to tighten monetary policy just yet. The Dow Jones Industrial Average closed 0.4% higher at 33,739, the S&P 500 gained 0.5% to 4,358, while the Nasdaq finished up 0.6% at 13,563.

Fed vice chair Philip Jefferson and Dallas Fed president Lorie Logan on Monday both highlighted how the recent spike in Treasury yields may have altered their outlook since the last policy meeting, with higher rates potentially doing enough of a job to keep financial conditions restrictive enough.

On Tuesday, Atlanta Fed President Raphael Bostic doubled down on the view, saying that the central bank is likely done tightening for now. Referring to bringing inflation down to the 2% target, Bostic said: "I actually don't think we need to increase rates anymore."

After being closed on Monday for Columbus Day and Indigenous Peoples Day, bond markets opened to see strong gains in US Treasuries, with the yield on a 10-year note sinking 15 basis points to 4.655%.

"A steady stream of dovish messaging from the Fed is just what the rally doctor ordered," said Stephen Innes, managing partner at SPI Asset Management.

"And with 10-year US Treasury yields trading nearly 25 basis points below Friday's pre-NFP levels, there is a growing sense we have seen peak rates, but significantly, investors are strongly coming around to the idea that the Fed has finally reached the end of its aggressive rate hike runway."

Markets were largely able to shake off ongoing conflict in the Middle East, with oil prices pulling back after a 4%+ surge the previous session. West Texas crude was down 0.6% at $85.83 a barrel on Tuesday.

No major economic data was released during Tuesday's session, with the focus firmly on the following day's US producer price inflation figures. Consensus estimates point to a slowdown in monthly price growth from 0.7% in August to 0.4% for September. The year-on-year rate is expected to remain unchanged at 1.6%.

Minutes from the latest Federal Open Market Committee meeting will also be out later in the evening, while the release of the consumer price index will be closely watched on Thursday.

Boeing, airlines higher

Airline stocks were on the rise, rebounding after heavy falls the previous session following a surge in oil prices, with American, Delta and United in demand. Even Boeing was flying higher despite the news that September deliveries of its 737 MAX jets fell to their lowest level since August 2021.

PepsiCo gained after the drinks giant beat forecasts with its third-quarter results and impressed with the market with guidance for 10% organic revenue growth this year.

Oil stocks lower after some strong gains the previous session, with ExxonMobil, Chevron and ConocoPhillips trading lower.

Kitchen supplies group Tupperware surged by over a quarter after the news that its executive vice chair and director Richard Goudis has stepped down. Shares have risen by nearly 90% since the start of July, but are still trading close to their all-time lows.