US close: Dow adds almost 600 points on eve of Fed decision

dl amc entertainment movie theaters theatres cinema leisure us usa united states of america unsplash — AMC EntertainmentPhoto by Chase Yi on Unsplash

Wall Street stocks closed above the waterline on Tuesday, even as traders remained concerned about the ongoing Russia-Ukraine conflict and a spike in Covid-19 cases in China, ahead of the Federal Reserve's all-important interest rate decision.

At the close, the Dow Jones Industrial Average was up 1.82% at 33,544.34, as the S&P 500 added 2.14% to 4,262.45 and the Nasdaq Composite was ahead 2.92% at 12,948.62.

The Dow closed 599.1 points higher on Tuesday, after a flat performance in the previous session as the Russia-Ukraine conflict continued to heat up and investors prepared for the Fed to raise its target funds rate for the first time in almost four years.

“In the US indices have managed to make headway, providing a contrast to Europe,” said IG chief market analyst Chris Beauchamp.

“Oil’s decline has provided a break for the relentless drumbeat of inflation concerns, although the vital commodity is still substantially higher than a month ago, meaning that while the worst of the forecasts now look excessive, a continued rise in CPI is still the expectation.

“Tomorrow’s FOMC meeting provides a vital moment for markets, as traders wait to see what the Fed will say and what their view is on the outlook for the next few months.”

News that Ukrainian capital Kyiv had enforced a 35-hour curfew was in focus earlier, with the curfew starting on Tuesday evening amid ongoing Russian missile strikes on the city.

Russia and Ukraine were set to resume ceasefire talks on Tuesday, as Moscow neared multiple deadlines on its debt payments.

Also drawing an amount of investor attention was the fact that China was now facing its worst Covid-19 outbreak since the height of the pandemic, raising fresh concerns regarding the recovery of the global economy moving ahead.

On the macro front, wholesale price pressures in the US edged past forecasts last month amid a spike in energy prices.

According to the Department of Labor, the headline rate of the year-on-year increase in total final demand prices was steady versus the month before at 10.0%.

In comparison to January however, the 0.8% month-on-month increase in prices was exactly as expected by economists at Barclays.

Elsewhere, manufacturing activity in the New York region declined in March for the first time since early in the Covid-19 pandemic, according to a survey released on Tuesday.

The New York Fed's Empire State general business conditions index fell to -11.8 from 3.1 in February.

That marked the lowest reading since May 2020 and was below expectations of 7.0.

According to the survey, 24% of respondents reported that conditions had improved over the month, while 35% said they had worsened.

The Federal Reserve, meanwhile, kicked off its two-day policy meeting on Tuesday, with market participants expecting the central bank to raise rates by 0.25% - the first interest rate hike since 2019 - in order to combat soaring inflation.

In the corporate space, airlines were in the green amid a raft of expectation upgrades, with Delta Air Lines up 8.7%, JetBlue Airways ahead 7.22%, Southwest Airlines rising 4.89%, and United Airlines jumping 9.19%.

Delta, JetBlue and Southwest all raised their earnings outlooks for the first quarter on Tuesday, while United reaffirmed it was anticipating operating revenue at the upper end of its previous guidance.

On the acquisition front - and in a rather bizarre piece of news - meme stock and cinema operator AMC Entertainment rose 6.78% after it announced it was buying 22% of Hycroft Mining, and the 71,000-acre Hycroft Mine in Nevada.

Hycroft shares were ahead 9.35% by the closing bell.

Dow Jones - Risers

Walt Disney Co. (DIS) $134.20 4.01%
Microsoft Corp. (MSFT) $287.15 3.87%
Procter & Gamble Co. (PG) $150.27 3.60%
Home Depot Inc. (HD) $328.54 3.20%
Apple Inc. (AAPL) $155.09 2.97%
Visa Inc. (V) $206.14 2.90%
McDonald's Corp. (MCD) $232.57 2.83%
Johnson & Johnson (JNJ) $176.14 2.59%
Boeing Co. (BA) $179.89 2.49%
Cisco Systems Inc. (CSCO) $55.60 2.39%