Stocks rose Tuesday, resuming their November rally, as comments from a Federal Reserve official raised hope that the central bank may not need to raise interest rates further.
The Dow Jones Industrial Average added 83.51 points, or 0.24%, to close at 35,416.98. The S&P 500 inched higher by 0.10% to 4,554.89, and the tech-heavy Nasdaq Composite gained 0.29% to end the session at 14,281.76.
Fed Governor Christopher Waller had expressed confidence earlier Tuesday that policy is "currently well positioned" to slow the economy and bring inflation back to 2%. His commentary comes ahead of the Federal Open Market Committee's policy meeting on Dec. 12-13. Markets generally expect the committee to keep its key lending rate steady.
Boeing helped lift the Dow on Tuesday, adding 1.4%, while Dow-member retailers Nike and Walmart gained 0.7% and 1.2%, respectively. The S&P 500 got a lift from Newmont Corporation and Synchrony Financial, which were higher by 6.3% and 5.1%, respectively.
Stocks have rallied this month. The Dow and S&P 500 are on pace to finish the month about 7.2% and 8.6% higher, respectively. The Nasdaq has climbed 11.1% in November.
"We really haven't been moving that violently over the last couple of weeks, which tells me some of the emotion that the bond market had been in over the past three months, but really for the past three years, might be starting to calm which I think would be a good thing," said Mark Hackett, Nationwide Financial's chief of investment research.
U.S. Treasury yields dipped on Tuesday, with the yield on the 10-year note last down nearly 6 basis points at 4.33%.
Hackett added that he remains "cautiously optimistic" about the health of the consumer and their willingness to continue spending.
Data released Tuesday showed consumer confidence improved in November, even as most still expect a recession ahead. The Conference Board's index rose to 102 for the month, higher than a downwardly revised 99.1 from October and ahead of the Dow Jones estimate for 101.
On the earnings front, CrowdStrike is expected to report earnings after the bell.
Stocks close in the green
Bank of America's Savita Subramanian maintains rosy 2024 outlook
Bank of America's Savita Subramanian is bullish on next year's market — not because of hopes that the Federal Reserve will no longer raise interest rates, she said, but because of how the market has handled what the Fed has already done.
The firm anticipates the S&P hitting 5,000 by the end of 2024. The S&P 500 hovered around flat on Tuesday at 4,552.5.
"There's a high probability of pullbacks next year around various areas of concern, but I do think that we're in a healthier market setup than we have been in a long time," Subramanian, Bank of America's head of U.S. equity and quantitative strategy, said on "Squawk Box" earlier Tuesday.
"The higher interest rates are gonna hit a lot of pockets of the economy, not necessarily public equities, because public equities have been marked for this environment," she said. "What I worry more about is all the stuff sloshing around in private equity, private credit, the shadow lending machine that's been taking place for the last 10-15 years. But public equity right now is marked to exactly what's happened, and that is a high interest rate environment."
— Pia Singh
Oil settles 2% higher as OPEC meeting speculation moves market
Oil prices rebounded Tuesday as traders speculate about OPEC production cuts while a fierce storm forced Kazakhstan to slash its output.
OPEC and its allies, OPEC+, are scheduled to meet virtually Thursday, with most analysts expecting the group will at least extend current cuts into 2024.
OPEC delegates told Bloomberg Monday that Saudi Arabia is pressing members to reduce their production quotas but Riyadh is being met with resistance.
"While oil is waiting for the OPEC plus agreement, speculation about a deal or no deal or a surprise cut continues to move markets," said Phil Flynn with the Price Futures Group.
The upside from cuts should be capped given OPEC members have low appetite for compliance these days, said Tamas Varga with OVM Oil Associates.
Kazakhstan's largest oilfields, meanwhile, have slashed output by 56% as a storm on the Black Sea disrupts exports.
-- Spencer Kimball
Major indexes head for best monthly performances this year
Despite muted trading on Tuesday, the three major indexes are on track to post major monthly gains.
The Dow is poised to finish the November trading month, which concludes with Thursday's closing bell, 6.9% higher. That would amount to the best monthly performance since October of 2022, when the blue-chip average added 14%.
If those performances hold, it would mark the best month for both since July of 2022. During that month, the broad S&P 500 advanced 9.1%, while the technology-heavy Nasdaq jumped 12.4%.
— Alex Harring
Retail stocks outperforming on Tuesday
The early signs of consumer strength at the start of the holiday shopping season appear to be making investors more comfortable with retail stocks.
The SPDR S&P Retail ETF (XRT) rose about 1%, on Tuesday, outperforming the broader market and erasing the modest decline the fund suffered on Monday.
Among the fund's top holdings, Foot Locker was one of the best performers, gaining nearly 3%.
— Jesse Pound
Oppenheimer sees positive setup for Salesforce's third-quarter results
Don't be surprised if