Stephen Culp
NEW YORK (Reuters) – The Nasdaq and Nasdaq indexes posted modest gains on Tuesday, a day ahead of major inflation data, as financial stocks fell as investors braced for major U.S. banks to begin earnings reporting season in Friday.
The tech-heavy index, backed by chips, posted stronger gains, with the S&P 500 rising nominally.
Quotes of blue chips closed virtually unchanged.
Wednesday’s consumer price index (CPI) is on most investors’ radars as they adjust expectations for the timing and extent of the Federal Reserve’s rate-cut phase following solid economic data such as last Friday’s bombshell jobs report.
“Markets are nervous about tomorrow’s CPI report and are buying protection (amid a growing perception that inflation could be uncomfortably high,” said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. “The market is trying to hedge itself.”
JPMorgan Chase & Co (NYSE:), Wells Fargo & Co and Citigroup Inc (NYSE:) were the three components of the S&P banking index that ended lower, according to a report on Friday.
“Financials kick off the first-quarter earnings season and often set the tone,” said Bill Northey, senior investment director at US Bank Wealth Management, Billings, Montana. “We view cyclical areas as an indicator of the health of corporate America.”
While analysts expect inflation to continue falling toward the U.S. central bank’s 2% target, the National Federation of Independent Business reported Tuesday that small business optimism hit an 11-year low in March, with inflation the most pressing concern.
“The continued deterioration in the small business sentiment index is actually very important,” Greene added. “This is the same thing we’ve seen in the last couple of cycles, where large companies are well protected while small businesses are under extreme pressure.”
The Dow Jones Industrial Average fell 9.13 points, or 0.02%, to 38,883.67. The S&P 500 added 7.52 points, or 0.14%, to 5,209.91 and the Nasdaq Composite added 52.68 points, or 0.32%, to 16,306.64.
Nine of the 11 major sectors in the S&P 500 closed higher, with real estate posting the largest percentage gain. Financial performance was the worst performer.
Analysts expect aggregate first-quarter earnings growth for the S&P 500 to be 5.0% year over year, up from 7.2% at the start of the quarter, according to LSEG.
Cryptocurrency and blockchain-related stocks fell, tracking the decline in Bitcoin prices. Exchange operator Coinbase (NASDAQ:) Global and software company MicroStrategy fell 5.5% and 4.8%, respectively.
Moderna (NASDAQ:) was a bright spot, jumping 6.2% after a personalized cancer vaccine developed by pharmaceutical company Merck showed promising results in early-stage trials.
Alphabet (NASDAQ:) Inc shares rose 1.1%, bringing the company closer to the $2 trillion market capitalization threshold.
Advancing issues outnumbered declining ones on the NYSE by a 1.44-to-1 ratio; On the Nasdaq, the ratio was 1.33 to 1 in favor of growth companies.
The S&P 500 hit 13 new 52-week highs and one new low; The Nasdaq Composite Index recorded 62 new highs and 77 new lows.
Volume on U.S. exchanges was 10.31 billion shares, compared with the full-session average of 10.31 billion over the past 20 trading days.