US Stocks Inch Higher Tuesday 06/06 15:50
U.S. stocks drifted higher Tuesday amid a vacuum of market-moving data,
nudging Wall Street closer to the edge of what's called a bull market.
NEW YORK (AP) -- U.S. stocks drifted higher Tuesday amid a vacuum of
market-moving data, nudging Wall Street closer to the edge of what's called a
The S&P 500 rose 10.06 points, or 0.2%, to 4,283.85. It's just 0.2% away
from finishing a day 20% above where it was in mid-October, as a long-predicted
recession has yet to hit and excitement around artificial intelligence has
helped a select group of stocks to soar.
The Dow Jones Industrial Average edged up by 10.42, or less than 0.1%, to
33,573.28, while the Nasdaq composite rose 46.99, or 0.4%, to 13,276.42.
This week has few top-tier economic reports and corporate earnings updates
to help Wall Street answer its main question. It wants to know which will
happen first: a recession or inflation falling enough to get the Federal
Reserve to start cutting interest rates, which have climbed so high they've
hurt various parts of the economy.
That's why next week looms large. The U.S. government will publish its
latest monthly updates on inflation, and the Federal Reserve will meet on
interest-rate policy. The bet on Wall Street is that the Fed may hold off on
hiking rates, which would be the first time that's happened in more than a
year, but could resume raising rates in July.
"What you're seeing in markets is a reaction to a Fed that's likely to pause
when the economy hasn't yet fallen into recession," said Brent Schutte, chief
investment officer at Northwestern Mutual Wealth Management. "I think the
unfortunate reality is for an overall recession."
Some parts of the economy have already buckled under the weight of much
higher interest rates, including manufacturing and the U.S. banking system.
Schutte expects the job market to follow eventually, even if a report on Friday
showed employers unexpectedly accelerated hiring last month.
"I think the Fed believes unless they create labor market slack, they're
still worried they have to do more" with rate increases to control inflation
"because the labor market is too tight," Schutte said. "I think that's what we
call a recession."
Some of the day's strongest action was in the cryptocurrency world after the
Securities and Exchange Commission charged Coinbase with operating its trading
platform as an unregistered national securities exchange, broker and clearing
Shares of its parent, Coinbase Global, tumbled 12.1% after the SEC also
accused it of being liable for some of Coinbase's violations. Other charges
focused on Coinbase's staking-as-a-service program, where users get payments
for their crypto almost like earning interest from a traditional bank savings
Coinbase criticized the SEC's approach to crypto, saying "the solution is
legislation that allows fair rules for the road to be developed transparently
and applied equally, not litigation."
A day earlier, the SEC filed 13 charges against another huge crypto trading
platform, Binance, and its founder. Binance said it had been in discussions to
reach a negotiated settlement to resolve the SEC's investigations and said the
SEC "has determined to regulate with the blunt weapons of enforcement and
litigation rather than the thoughtful, nuanced approach demanded by this
dynamic and complex technology."
Elsewhere in markets, oil prices gave up some gains driven earlier in the
week by Saudi Arabia's announcement that it would cut production to boost
crude's price. A barrel of U.S. crude fell 41 cents to $71.74. A barrel of
Brent crude, the international standard, sank 42 cents to $76.29.
Both were close to $120 a year ago but have fallen amid worries about a
strapped global economy's need for fuel.
On the winning side of Wall Street was Gitlab, which soared 31.2% after the
software development platform gave a revenue forecast for the fiscal year that
topped analysts' expectations. It also said it expects to turn in a milder loss
than Wall Street had forecast, as it benefits from a rush into artificial
A frenzy around AI has helped a handful of stocks soar to immense gains this
year, including Nvidia's 164.5% surge. That's helped drive much of the S&P
500's gains in 2023, but it's also caused critics to question whether a bubble
is forming. They also say the furor around AI may be masking weakness
underneath the S&P 500's surface.
Even though the S&P 500 is nearing a bull market, almost as many stocks
within it are down this year as up as worries remain about falling corporate
profits, still-high inflation and much higher interest rates than a year ago.
Blunting some of that criticism, many banks rose Tuesday.
They've been under pressure because the Fed's fastest flurry of rate hikes
in decades has pushed some bank customers to pull their deposits and put them
into money-market funds paying more in interest. At the same time, rate hikes
have knocked down values of bonds and other investments banks made when rates
The pressure has caused several high-profile bank failures and pushed Wall
Street to punish stocks of other banks as it hunts for possible victims.
Comerica rose 7.1% for the biggest gain in the S&P 500.
Some of the banks under the harshest scrutiny also climbed, including an
8.1% jump for PacWest Bancorp.
In the bond market, the yield on the 10-year Treasury slipped to 3.68% from
3.69% late Monday. It helps set rates for mortgages and other important loans.
In stock markets abroad, Australia's S&P ASX 200 fell 1.2% after its central
bank lifted its benchmark interest rate by 0.25 percentage points to 4.1% and
warned further rises could follow.