The S&P 500 closed at a new high on Tuesday as Oracle shares rose and consumer pricing data did not diminish investors' anticipation of interest rate decreases in the coming months.
Oracle (ORCL.N), opens new tab shares rose 11.7% to a record high a day after reporting strong quarterly earnings and announcing a joint announcement with Nvidia (NVDA.O).
Nvidia surged 7.2% and a semiconductor index (.SOX), opens new tab, rose 2.1% to end a two-day losing run. The Labor Department recorded a 0.4% CPI increase last month after 0.3% in January. After gaining 0.4% in January, consumer prices rose 0.4% in February without volatile food and energy.
“Investors have gotten comfortable with the idea that it's not about when the Fed will lower rates but by how much, and a delay—whether in May like many were hoping or in September—really doesn't matter," said Oliver Pursche, senior vice president and advisor for Wealthspire Advisors in Westport, Connecticut.
The CME FedWatch Tool suggested a 70% chance of the first rate drop in June, down from 71% before the inflation news. Dow Jones Industrial Average (.DJI) climbed 235.74 points, or 0.61%, to 39,005.4. The Nasdaq Composite (.IXIC) gained 246.36 points, or 1.54%, at 16,265.64, while the S&P 500 (.SPX) gained 57.3 points, or 1.12%, at 5,175.24.
"If you look at economic data, it continues to be pretty strong," he said. "And from my perspective as a consumer, employee and investor, I'd rather have a strong economy and slightly elevated interest rates than a weak economy that requires stimulus."
Boeing (BA.N) shares slumped 4.3%. In a note to staff on Tuesday, Boeing announced weekly compliance checks for every 737 production work area and equipment audits to improve quality. Boeing manufacture has been halted by the FAA due to a mid-air panel blowout on a new Alaska Airlines <ALK.N> 737 MAX 9 jet on Jan. 5. United States carriers warned that Boeing plane delivery delays could derail their capacity ambitions.
Southwest Airlines (LUV.N) fell 14.9%. U.S. exchanges traded 10.97 billion shares, compared to 12.07 billion for the full session over the past 20 days. On the NYSE, advancing issues outnumbered decliners 1.28-to-1; on Nasdaq, 1.20-to-1. The S&P 500 had 48 new 52-week highs and no new lows, while the Nasdaq Composite had 59 and 118.
follow for more updates