U.S. stocks rose at the start of trade Tuesday, with bulls looking to extend a winning streak for the Dow Jones Industrial Average to five sessions as Federal Reserve policy makers prepare to convene a two-day policy meeting.
The Dow Jones Industrial Average DJIA, +0.46% rose 132 points, or 0.5%, at 26,048, while the S&P 500 index SPX, +0.36% added 13 points, or 0.5%, to 2,846. The Nasdaq Composite Index COMP, +0.31% gained 38 points, or 0.5%, to 7,752.
What’s driving the market?
While no change in rates is expected, investors will be focused on the Fed’s policy statement, remarks by Chairman Jerome Powell at his news conference, and policy makers’ forecasts of future rate moves. Of particular interest is whether the Fed will announce plans to bring its balance-sheet runoff effort to an early end.
See: Fed seen revealing ‘how and when’ it will stop shedding balance sheet assets
The Fed is widely expected to maintain the tone it adopted in January, when it abruptly put its rate-hike plan on pause and took a wait-and-see approach to future rate moves.
Also read: Here are 3 things to watch when the Fed unveils its latest dot plot
Investors on Monday appeared to shake off news reports that a meeting between President Donald Trump and Chinese leader Xi Jinping to formally end a U.S.-China trade dispute is unlikely to occur until June. A meeting had previously been indicated for this month.
See: Bulls looking for repeat of 2016 stock-market rally will be disappointed: Morgan Stanley
After suffering a steep year-end selloff, stocks have rebounded sharply. The S&P 500 is up nearly 16% from its Christmas Eve low and now stands 3.3% below its record close of 2,930.75 on Sept. 20.
Read: Why stocks can continue to rally in short term after investors suffered ‘parable of the boiling frog’
What are analysts saying?
“The Federal Reserve begin their two day meeting today, and some dealers are anticipating a neutral update from the U.S. central bank,” said David Madden, market analyst at CMC Markets UK, in a note. “In recent months, the Fed have rowed back on their hawkish rhetoric and have moved more towards a middle-of-the- road position, and an absence of hawkish language is likely to lift investment sentiment.”
What stocks are worth watching?
Shares of Michaels Cos. MIK, +7.46% rose 7% Tuesday, after the arts-and-crafts retailer reported fiscal fourth-quarter earnings and revenue that surpassed Wall Street expectations, though the company disappointed in its 2019 outlook. The stock is down 45% over the past 12 months.
DSW Inc. DSW, -14.46% stock fell 12.3%, after the discount footwear retailer reported fiscal 2018 earnings Tuesday morning that fell short of analyst forecast.
Shares of Nvidia Corp. NVDA, +2.85% are in focus Tuesday after the company announced Monday evening that Amazon.com Inc. AMZN, +0.99% would now be using its T4 data-center chips. The stock is up 3.1% Tuesday.
Revlon Inc. REV, -2.79% stock is down 7% early Tuesday, after the cosmetics maker reported unaudited fourth-quarter and 2018 earnings, saying it spotted a “material weakness” in its internal controls over financial reporting for 2018. The company said it would file its 2018 Form 10-K no later than March 29, while saying that financial results aren’t expected to change.
Shares of Chesapeake Energy Corp. CHK, +5.87% rose 3.8% Tuesday, after Raymond James analyst James Freeman raised his target price on the stock from $4.00 to $4.50.
What data are in focus?
Investors will get an estimate of growth in factory orders for the month of January, when the Commerce Department issues a report at 10 a.m. Eastern Time. Economists polled by MarketWatch expect an increase of 0.4%, compared with December’s 0.1% rise.
How are other markets trading?
Asian stocks were muted during trade Tuesday, with Japan’s Nikkei 225 NIK, -0.08% edging 0.1% lower, China’s Shanghai Composite Index SHCOMP, -0.18% falling 0.2%, and Hong Kong’s Hang Seng Index HSI, +0.19% adding 0.2%.
In Europe, stocks were on rise Tuesday, with the Stoxx Europe 600 SXXP, +0.81% adding 0.8%.
Crude oil CLJ9, +0.59% maintained its recent strength, adding 0.4%. The price of gold GCJ9, +0.67% meanwhile edged higher, while the U.S. dollar DXY, -0.16% lost ground versus major rivals.
