The S&P 500 and Nasdaq edged higher on Tuesday, propped up by gains in Microsoft shares, while investors awaited comments from Federal Reserve Chair Jerome Powell to assess the central bank’s stance on monetary policy.
Powell’s Q&A at the Economic Club of Washington is due at 12:40 p.m. EST (1740 GMT). The session will be in focus after a strong jobs report last week stymied rising hopes of less aggressive monetary policy.
“It looks like we’re continuing to see a cautious tone for markets ever since the jobs report on Friday,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
Traders are speculating that the central bank would push the benchmark rate to 5.1% in June, levels that policymakers have backed vociferously.
Boosting the tech-heavy Nasdaq (.IXIC) and the S&P 500 (.SPX) was Microsoft Corp (MSFT.O). The company’s shares added 2.6% on speculations that the megacap company would unveil an integration of ChatGPT, a chatbot from OpenAI, into its products.
U.S.-listed shares of Baidu Inc soared 10.7% as the Chinese search engine said it would conclude the testing of its ChatGPT-style project ‘Ernie Bot’ in March.
Six of the top 11 sectors on the S&P 500 fell, but technology (.SPLRCT) was among top gainers, up 0.9%.
“Artificial intelligence and the idea of ChatGPT has really struck a chord with investors, and people are starting to really look to AI as potentially the next big trend,” Zaccarelli added.
Among top gainers on the Dow Jones Industrial Average (.DJI), Boeing Inc (BA.N) climbed 2.2% after the U.S. planemaker confirmed it expects to cut about 2,000 white-collar jobs.
Views that rates would stay higher for longer dragged U.S. stock indexes down on Monday. But, all three major averages are in the black for 2023, with the Nasdaq adding over 13%, led by a revival in battered mega-cap growth stocks.
So far, more than half of the companies on the S&P 500 have reported quarterly earnings, with 69.1% of them beating expectations, according to Refinitiv. Still, analysts expect fourth-quarter earnings to decline 3.1%.
At 12:22 p.m. ET, the Dow was down 67.04 points, or 0.20%, at 33,823.98, the S&P 500 was up 2.60 points, or 0.06%, at 4,113.68, and the Nasdaq was up 28.93 points, or 0.24%, at 11,916.38.
DuPont De Nemours Inc (DD.N) jumped 5.6%, on a higher-than-expected quarterly profit supported by higher pricing for its products.
Bed Bath & Beyond (BBBY.O) plunged 45.0% as the embattled home-goods retailer seeks a $1 billion raise in a last-ditch effort to avoid bankruptcy.
Later into the day, U.S. President Joe Biden will deliver the annual State of the Union address to a joint session of Congress.
Declining issues outnumbered advancers for a 1.27-to-1 ratio on the NYSE and for a 1.47-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and two new lows, while the Nasdaq recorded 52 new highs and 23 new lows.