U.S. stocks jumped on Tuesday, lifting the Dow industrials to a record, as oil and other commodities surged on a report that China's central bank would increase stimulus and on the view that the Federal Reserve would not rush to hike rates.
Stocks turned decisively higher during a webcast on the Wall Street Journal's website, in which journalist Jon Hilsenrath made the argument that the Fed would keep its "significant underutilization" of labor market resources in its expected statement on Wednesday, said Peter Boockvar, chief market analyst at the Lindsey Group.
The Fed's two-day policy meeting ends on Wednesday, with the central bank expected to release a statement at 2 p.m. Eastern, and a news conference 30 minutes later.
"It's just his opinion, but the timing coincided," said Boockvar. Hilsenrath is widely seen as being exceptionally close to Fed officials, and his stories have moved markets in the past.
The headlines fueled thinking that the Fed would stick with wording indicating it would wait a "considerable period as opposed to a quicker tightening and a rate hike," said Stephen Carl, head equity trader at the Williams Capital Group.
Also bolstering equities and commodities was a Bloomberg report, which cited Sina.com, in saying the People's Bank of China would begin a 500 billion yuan standing lending-facility to the country's five largest banks.
"So basically you've got a stealth injection of liquidity by the People's Bank of China, and you've got a snap back in oil and copper," said Art Hogan, chief market strategist at Wunderlich Securities.