U.S. stocks pulled off an unexpected comeback on Tuesday, closing with modest gains after dipping earlier in the day. The turnaround comes ahead of a busy week for economic data, with inflation being a key focus for investors.
Market Recap
- The S&P 500 edged up 0.1%, reversing course after initially trading down 0.4%.
- The Dow Jones Industrial Average ended the day flat, closing slightly above its opening price.
- The Nasdaq Composite outperformed the broader market, rising 0.3%.
Tesla Leads the Charge
Tesla was a bright spot, surging over 5% after a strong earnings report. Other tech giants like Apple and Microsoft saw more muted gains.
What Caused the Shift?
The rebound can be attributed to a slight easing of treasury yields, which had been putting pressure on stocks recently. Investors are now looking ahead to Wednesday's release of the Consumer Price Index (CPI) report, a key measure of inflation.
What to Watch For
The CPI report will be the main event this week. A higher-than-expected inflation reading could trigger another sell-off, while a cooler report might provide further support for the market.
Here are some additional factors to keep an eye on:
- Earnings season: Several major companies are scheduled to report earnings this week, which could impact individual stocks.
- Geopolitical tensions: The ongoing conflict between Russia and Ukraine remains a wild card for the market.
- Federal Reserve policy: Investors will be looking for any clues about the Fed's plans for future interest rate hikes.
Overall, while Tuesday's gains were modest, they suggest a cautious optimism among investors. The coming days will be crucial in determining the direction of the market.