US stocks opened higher on Tuesday, as investors assessed big bank earnings and a retail sales surprise amid growing conviction an interest-rate cut is near.
The Dow Jones Industrial Average (^DJI) rose roughly 0.5% shortly after the opening bell, after the blue-chip index topped 40,000 to notch an all-time closing high. The S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) were each up more than 0.3% on the heels of their own daily wins.
Earnings season picked up pace before the bell, with Bank of America (BAC) and Morgan Stanley (MS) the latest to report. BofA quarterly profit fell but beat estimates, while MS profit jumped, both offering signs of an investment banking revival. Results from Charles Schwab (SCHW) and UnitedHealth (UNH) are also on Tuesday’s docket.
More broadly, stocks are holding onto gains after chair Jerome Powell signaled the Federal Reserve is gearing up to start lowering rates soon, given recent solid inflation prints.
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Retail sales came in flat but better than expected in June, data out Tuesday showed, adding to the easing in price pressures that have boosted faith in a September cut — a prospect that has already wakened wider bullishness for stocks beyond techs. Traders were pricing in a 100% likelihood the Fed will bring down borrowing costs that month, according to CME FedWatch data.
But some lawmakers have warned a Fed pivot before November’s presidential election could be seen as a partisan move.
At the same time, political matters continued to preoccupy a market betting that former President Donald Trump is an even clearer front-runner for the White House after he survived an assassination attempt over the weekend. The Republican candidate’s pick of Sen. J.D. Vance as his running mate is seen as strengthening his chances.
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