🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

US stocks boosted by healthy retail sales data; Fed meeting starts

Published 17/09/2024, 10:12 am
© Reuters
INTC
-
MSFT
-
ESZ24
-
1YMZ24
-
NQZ24
-

Investing.com-- U.S. stocks rose Tuesday as a stronger-than-expected retail sales report helped allay fears of a sharp economic slowdown ahead of the Federal Reserve's latest policy-setting meeting.

At 09:35 ET (13:35 GMT), Dow Jones Industrial Average rose 93 points, or 0.2%, S&P 500 gained 26 points, or 0.5%, and NASDAQ Composite climbed 135 points, or 0.8%.

Retail sales unexpectedly rise in August

Data released earlier Tuesday showed that US retail sales rose 0.1% in August on a monthly basis, better than the expected 0.2% decrease, after having climbed a revised 1.1% the prior month.

This number helped reassure investors that the consumer remained relatively healthy, which could prevent a sharp economic slowdown given the importance of the retail sector to the U.S. economy.  

This economic news comes as the Federal Reserve starts its two-day policy-setting meeting, which is expected to result in a cut to interest rates at its conclusion on Wednesday.

Traders were seen pricing in a 68% chance for a 50 bps reduction and a 32% chance for a 25 bps cut, CME Fedwatch showed.

Uncertainty over the scale of the cut had spurred some volatility on Wall Street in recent sessions, although both the S&P 500 and the Dow Jones Industrial Average remained close to record highs. 

Comments from Fed Chair Jerome Powell at the conclusion of the two-day Fed meeting will be studied carefully, as investors seek guidance of the likely extent of the easing cycle that could bring more interest rate cuts in the coming months. 

Intel surges on foundry plans

In the corporate sector, Intel (NASDAQ:INTC) rallied over 3% after the chipmaker announced plans to spin off its foundry business, and that it will sell off part of its stake in Altera. 

The plan will see Intel turn its foundry business into a unit with its own board, and will also allow the cash-burning unit to raise capital from external investors. 

The move comes just a month after Intel clocked heavy share losses on disappointing quarterly earnings.

Intel also announced a deal to make a custom chip for Amazon's (NASDAQ:AMZN) web services unit.

Shares of Microsoft (NASDAQ:MSFT) rose 1.7% after the software giant announced a $60 billion share buyback program, and also hiked its quarterly dividend by 10%. 

Crude muted ahead of API data

Crude prices edged higher Tuesday, continuing to build on the previous gains caused by the disruption to U.S. output in the wake of Hurricane Francine, ahead of the latest figures of the country’s crude stockpiles.

By 09:35 ET, the Brent contract climbed 0.1% to $72.80 per barrel, while U.S. crude futures (WTI) traded 0.2% higher at $69.18 per barrel.

Both contracts settled higher on Monday in the aftermath of the latest hurricane to impact the Gulf of Mexico crude-producing region, and as traders awaited the start of an easing cycle by the U.S. Federal Reserve.

More than 12% of crude production and 16% of natural gas output in the U.S. Gulf of Mexico remained offline, according to the U.S. Bureau of Safety and Environmental Enforcement on Monday.

The American Petroleum Institute is set to reveal its weekly inventory data later in the session, ahead of the official figures on Wednesday, and traders are expecting another drop in U.S. crude stockpiles.

(Ambar Warrick contributed to this article.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.