U.S. stocks were little changed on Tuesday as investors digested conflicting remarks from Federal Reserve officials, with upbeat consumer data providing some lift.
All three major U.S. stock indexes lost momentum as the session progressed. The S&P 500 and the Nasdaq were last essentially flat, while the blue-chip Dow retained a modest gain.
“The short-term trend has been an up market, so unless we get information that’s really negative or unexpected, investors are going to continue to buy stocks,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
“Traders are still going to take profits on uncertain days as we get toward the end of the year,” Carlson added. “But there’s a pretty long list of reasons why this market has the potential to continue to move higher.”
Market participants now await remarks from monetary policymakers ahead of next month’s meeting of the Federal Open Market Committee (FOMC).
Fed Governor Christopher Waller said on Tuesday he is “increasingly confident” that the current level of central bank’s policy rate is sufficiently restrictive and even hinted at the possibility of rate cuts in the months ahead should inflation continue to fall closer to the Fed’s 2% target.
Chicago Fed President Austan Goolsby touted progress in bringing inflation down at a pace not seen since the 1950s.
On the other hand, remarks from Fed Governor Michelle Bowman suggested another rake hike could be necessary to rein in inflation in a timely manner.
“I don’t know if it’s a campaign of confusion,” Carlson said. “It feels orchestrated; it’s like if they hear somebody say one thing, they contradict the other.”
Financial markets have priced in a near-certain 98.9% likelihood that the FOMC will let the Fed funds target rate stand at 5.25%-5.50% when it convenes next month, according to CME’s FedWatch tool.
The crucial holiday shopping season has shifted into high gear, with survey data from the National Retail Federation suggesting consumers plan to spend about 5% more this year.
That corresponds with the Conference Board’s consumer confidence data released early in the session, which surprised to the upside due to improved near-term expectations.
Later in the week, the Commerce Department is expected to release its second stab at third-quarter GDP, and its broad-ranging Personal Consumption Expenditures (PCE) report, which covers income, spending and crucially, inflation.
At 2:17 p.m. ET, the Dow Jones Industrial Average rose 64.23 points, or 0.18%, to 35,397.7, the S&P 500 lost 1.65 points, or 0.04%, at 4,548.78 and the Nasdaq Composite dropped 3.16 points, or 0.02%, to 14,237.86.
Boeing added 1.4% after RBC Capital Markets upgraded the stock to “outperform” from “sector perform” and set a Street-high price target.
U.S.-listed shares of Chinese e-commerce firm PDD Holdings surged 18.0% after the company beat revenue estimates.
Affirm Holdings jumped 9.1%, extending its Cyber Monday boost.
Chipmaker Micron Technology’s shares slid 3.0% after the company said it expects first-quarter operating expenses to be higher than previously forecast.
Advancing issues outnumbered decliners on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favored decliners.
The S&P 500 posted 19 new 52-week highs and one new low; the Nasdaq Composite recorded 58 new highs and 93 new lows.