Wall Street indexes closed higher on Tuesday, to notch their third straight day of gains, after dovish comments from U.S. Federal Reserve officials pushed Treasury yields lower as investors cautiously monitored developments in the Middle East.
Market Snapshot
The Dow Jones Industrial Average rose 134.65 points, or 0.4%, to 33,739.3, the S&P 500 gained 22.58 points, or 0.52%, to 4,358.24 and the Nasdaq Composite added 78.61 points, or 0.58%, to 13,562.84.
Market Movers
PepsiCo (PEP) reported third-quarter adjusted earnings of $2.25 a share, topping analysts’ estimates of $2.15. Revenue of $23.5 billion also beat expectations. The beverage and snacks maker also raised its full-year guidance. The stock rose 1.9%.
Truist Financial (TFC) rose 6.7% and was the top-performing stock in the S&P 500 following a report from Semafor that said the bank was in negotiations to sell the remaining 80% of its insurance brokerage business for $10 billion to private-equity firm Stone Point. Truist told Barron’s it doesn’t comment on rumors or speculation.
Unity Software (U) rose 1% after the announcement that John Riccitiello would be retiring as president, chief executive, and chairman of the game development platform company. Unity last month announced a controversial new price hike plan that was met with a revolt from customers. The company was forced to apologize and backtrack on some parts of the plan.
Rivian Automotive (RIVN) rose 4.6% to $19.64 after shares of the electric-truck maker were upgraded to Buy from Neutral with a price target of $24. The stock fell sharply last week after Rivian announced it was selling $1.5 billion in convertible notes to raise additional cash.
Electronic Arts (EA) was up 2.8% to $128.08 after BofA raised its rating on the videogame company to Buy from Neutral and increased the price target to $150 from $145.
Skyworks Solutions (SWKS) was up 0.1% to $98.30 and Qorvo (QRVO) declined 1.7% to $93.26 after Citi downgraded both stocks to Sell from Neutral. Citi cut its target price on Skyworks to $87 from $116, and its target on Qorvo to $78 from $116.
Northrop Grumman (NOC), like other defense stocks, led the S&P 500 on Monday following the Hamas attack on Israel and jumped 11%. But it was down 1.4% on Tuesday. Lockheed Martin (LMT), which gained 8.9% on Monday, fell 0.3%.
Akero Therapeutics (AKRO) dropped 63% after results were mixed for its lead product candidate, a treatment for nonalcoholic steatohepatitis, a form of fatty liver disease.
Top line results released by Ventyx Biosciences (VTYX) from its trial of VTX002 in patients with moderate-to-severely active ulcerative colitis were at the lower end of company guidance and the stock sank 26%.
Market News
IMF Warns of Stubborn Inflation and Weaker Global Growth in 2024
The International Monetary Fund lifted its global inflation forecast for next year and called for central banks to keep policy tight until there’s a durable easing in price pressures.
The IMF boosted its projection for the pace of consumer price increases across the world to 5.8% for next year in its World Economic Outlook released Tuesday, up from 5.2% seen three months ago. The call for vigilance on inflation comes as it also trimmed the forecast for economic growth in 2024.
In most countries, the IMF, an institution charged with monitoring the health of the global economy, foresees inflation remaining above central bank targets until 2025.
China Mulls New Stimulus, Higher Deficit to Meet Growth Goal
China is considering raising its budget deficit for 2023 as the government prepares to unleash a new round of stimulus to help the economy meet the government’s annual growth target, according to people familiar with the matter.
Policymakers are weighing the issuance of at least 1 trillion yuan ($137 billion) of additional sovereign debt for spending on infrastructure such as water conservancy projects, said the people, asking not be identified discussing a private matter.
AMD to Acquire AI Software Startup in Effort to Catch Nvidia
AMD said on Tuesday it plans to buy an artificial intelligence startup called Nod.ai as part of an effort to bolster its software capabilities.
In its race to catch rival chipmaker Nvidia, Advanced Micro Devices (AMD) plans to invest heavily in the critical software necessary for the company's advanced AI chips. Through more than a decade of work, Nvidia has built a powerful advantage in the AI chip market through the software it makes, and the software developer ecosystem.
