On Monday, Wall Street continued with its winning streak for the fourth straight session, as a strong rally in stocks saw them close higher for the day.
Investors were waiting for the vital consumer price index (CPI) data that would offer clues about the severity as well as the duration of the monetary policy tightening by the Federal Reserve.
All three major US stock indexes got a boost from technology and energy shares that saw them rise to their highest in two weeks.
Moreover, they also recorded gains for the fourth consecutive session, which saw growth stocks record more gains as opposed to value.
The CPI data from the Labor Department is scheduled for release before the beginning of Tuesday’s trading session and is considered the main event for the week.
Market participants will be analyzing the data for any signs of the magnitude of an interest rate hike to expect from the US Fed in the next week.
Market analysts said that they believe the CPI would fall slightly and the market hopes that this would lead to smaller rate hikes after September’s meeting.
Therefore, the market appeared to be in a risk-on mode for the day.
Last Thursday, Jerome Powell, the chair of the Fed, asserted that they were committed in their battle against inflation and would continue to do so until they have tackled it successfully.
Economists believe that a 0.1% drop in the CPI would be seen from July to August, which would bring it down to 8.1% for the year.
This is primarily because of a decline in commodity prices. Traders have already priced in bets of a 75 basis points increase in the September meeting of the Federal Open Markets Committee (FOMC).
A 92% probability has been priced in for the meeting next week, but they are hoping that a 50 basis points hike would come in the next meeting and further declines after that.
There was a 0.71% rise in the Dow Jones Industrial Average, as it gained by 229.63 points to reach 32,381.34.
A 1.06% increase in the S&P 500 index saw it rise by 43.05 points to reach 4,110.41, while a 1.27% gain in the Nasdaq Composite saw it go up by 154.10 points to reach 12,266.41.
Out of all the 11 major sectors of the S&P 500 index, it was the energy that saw the biggest gains due to rising prices of crude. Every single sector was trading in the green for the day.
Transports, which are considered economically sensitive, were able to outperform the market, as megacaps gave the biggest lift.
Apple Inc. saw its shares rise by 3.9%, which gave the biggest boost to the Nasdaq Composite and S&P 500, only days after the company released its latest iteration of gadgets.
There was a 1.8% drop in Twitter shares, as the company is embroiled in a legal battle with Elon Musk for his decision to scrap an acquisition deal of the social media company.