Stocks advanced on Tuesday as investors continued their early New Year rally while awaiting economic data and corporate earnings later in the week.
The Dow Jones industrial average rose 186.45 points, or 0.56%, to end at 33,704.10. The S&P 500 gained 0.70% to trade at 3,919.25 points.
The Nasdaq composite led the major indexes for another day, adding 1.01% to end the session at 10,742.63. The average has risen over the past three sessions as hopes of cooling inflation have pushed investors into tech stocks. It was the index’s first three-day gain since November.
Billionaire investor Paul Tudor Jones was bullish on the stock market Tuesday morning, saying the Federal Reserve will not crash the economy and stop raising rates before doing so. Jones, while noting that he did not make a specific forecast, said there is strong demand for the stock this year due to share repurchases and mergers.
“You’ve probably got a trillion dollars of short-term demand in U.S. stocks,” Jones said on CNBC on Tuesday. “Squawk Box.” “Where are the sales going to come in to meet the demands from the mix of buybacks, corporate line items, some buybacks and M&A? It’s a significant amount. Cederis paribus, all things being equal, the stock market will go up. 7% or 8% this year.”
Investors entered the new year worried that higher interest rates could push the economy into recession. However, many are betting that inflation is beginning to slow. They will look to Thursday’s upcoming consumer price index data and Friday’s big bank earnings for signals about the health of the economy or how the central bank will move interest rates forward.
“We’re going to be in a very tight range until at least Thursday with the CBI report, and we’ll be directionless until the kickoff to earnings season later this week,” Megan Hornman said. Officer of Verdens Capital Advisors. “Right now, I think the market is kind of stuck in the middle of waiting for economic data and absorbing some of the central bank’s speech.”