(Reuters) – U.S. stocks rose on Tuesday with technology and financial shares leading gains, as investors expected a more accommodative policy stance at the end of the Federal Reserve’s two-day meeting this week.
FILE PHOTO: A trader passes by screens showing Spotify on the floor at the New York Stock Exchange (NYSE) in New York, U.S., March 13, 2019. REUTERS/Brendan McDermid
A flurry of downbeat economic data this month has supported market expectations that the Fed may reinforce a halt to further interest rates hikes. The central bank will conclude its deliberations with a news conference on Wednesday.
Investors will also be watching out for the “dot plot,” a diagram showing individual policymakers’ rate views for the next three years, along with details on the Fed’s plans to reduce holdings in bonds.
“There is optimism that the Fed is going to keep rates on hold, the economy is chugging along and we don’t see any inflation,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
“Investors don’t want to miss out on the low interest rate environment which will help fuel the rise in stock prices.”
The interest-rate sensitive financial stocks rose 0.65 percent, boosted by big U.S. lenders. The bank sub-sector gained 0.85 percent, up for the fifth straight session.
The technology sector advanced 0.38 percent while the Philadelphia SE chipmakers index rose 0.84 percent.
At 9:46 a.m. ET the Dow Jones Industrial Average was up 131.80 points, or 0.51 percent, at 26,045.90. The S&P 500 was up 10.70 points, or 0.38 percent, at 2,843.64 and the Nasdaq Composite was up 25.61 points, or 0.33 percent, at 7,740.09.
Energy stocks gained 0.71 percent, the most among the S&P sectors as oil prices hovered near 2019 highs on OPEC-led supply cuts.
Among the 11 major sectors, only defensive utilities was in the red while consumer staples and real estate eked out the least gains.
Optimism that the Fed will remain less aggressive in raising rates and hopes of a resolution to a bitter trade dispute between the U.S. and China helped the markets claw back most of their losses from late last year.
The benchmark S&P 500 hovers at a five-month high and is just 3 percent away from its September record closing high.
Chip designer Nvidia Corp rose 3 percent on partnering with Softbank Group Corp and LG Uplus Corp to deploy cloud gaming servers in Japan and Korea later this year.
Yum Brands Inc dipped 0.9 percent after J.P.Morgan downgraded the restaurant chain owner’s stock to “neutral” from “overweight”.
Advancing issues outnumbered decliners for a 2.52-to-1 ratio on the NYSE and a 1.60-to-1 ratio on the Nasdaq.
The S&P index recorded 27 new 52-week highs and no new low, while the Nasdaq recorded 36 new highs and 13 new lows.
Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta