U.S. Stocks Remain Firmly Positive After Early Upward Move

(RTTNews) - Stocks moved mostly higher early in the session on Tuesday and continue to turn in a strong performance in afternoon trading. The major averages are adding to the gains posted in the previous session, with the Nasdaq and S&P 500 once again reaching their best intraday levels in over a year.

Currently, the major averages are hovering firmly in positive territory. The Dow is up 191.00 points or 0.6 percent at 34,257.33, the Nasdaq is up 100.34 points or 0.8 percent at 13,562.27 and the S&P 500 is up 31.20 points or 0.7 percent at 4,370.13.

The continued strength on Wall Street comes following the release of the Labor Department's highly anticipated report on consumer price inflation in the month of May, which showed prices edged slightly higher.

The report said the consumer price index inched up by 0.1 percent in May after climbing by 0.4 percent in April. Economists had expected prices to tick up by 0.2 percent.

Excluding food and energy prices, core consumer prices rose by 0.4 percent in May, matching the increase seen in each of the two previous months as well as economist estimates.

The Labor Department also said the annual rate of consumer price growth slowed to 4.0 percent in May from 4.9 percent in April. Economists had expected the pace of growth to slow to 4.1.

The year-over-year growth in May marked the smallest annual increase since the period ending March 2021.

The annual rate of core consumer price growth also slowed to 5.3 percent in May from 5.5 percent in April, in line with expectations.

The data has added to optimism about the Federal Reserve pausing its recent interest rate increases when the central bank announces its monetary policy decision on Wednesday.

Following the release of the report, CME Group's FedWatch Tool is indicating a 91.9 percent chance the Fed leaves interest rates unchanged.

"Wall Street is becoming a little bit hopeful here that an FOMC June skip could eventually become a July pause," said Edward Moya, senior market analyst at OANDA.

He added, "Inflation is mostly heading lower and some of the leading indicators (car wholesale prices, weakening consumer) support the argument that the disinflation process will continue."

Sector News

Oil service stocks continue to see substantial strength amid a rebound by the price of crude oil, driving the Philadelphia Oil Service Index up by 3.0 percent.

The strength in the sector comes as crude for July delivery is surging $2.33 to $69.45 a barrel after plummeting $3.05 to $67.12 a barrel on Monday.

News China's central bank unexpectedly lowered a short-term lending rate is also contributing to considerable strength among steel stocks, as reflected by the 2.4 percent jump by the NYSE Arca Steel Index.

Chemical stocks have also shown a significant move to the upside on the day, with the S&P Chemical Sector Index climbing by 2.1 percent to its best intraday level in over a month.

Banking, oil producer and semiconductor stocks are also seeing notable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index shot up by 1.8 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.

The major European markets also moved to the upside on the day. While the German DAX Index advanced by 0.8 percent, the French CAC 40 Index increased by 0.6 percent and the U.K.'s FTSE 100 Index rose by 0.3 percent.

In the bond market, treasuries are seeing modest weakness after failing to sustain an early upward move. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 3.784 percent.