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US stocks rose on Tuesday, as Citigroup led a surge in bank shares after Berkshire Hathaway revealed strong retail sales in April to ease some concerns about slowing US economic growth. Ten of the 11 major S&P sectors advanced, with financials and technology up 2% each.
Economic Data
US retail sales increased 0.9% in April as consumers bought motor vehicles amid an improvement in supply and frequented restaurants.
Industrial production accelerated 1.1% last month, higher than estimates of 0.5%, and followed by a 0.9% advance in March.
The latest US economic data is consistent with continued economic growth in the second quarter and not a recession underway. The industrial sector is running too hot and needs to slow for inflation to get under control. The Fed will raise the federal funds target half a percentage point at each of the next two meetings to throw some sand in the economy’s gears.
Other Developments
After hitting seven-week highs, crude oil prices fell after Fed Chair Jerome Powell warned the US economy could be hurt by attempts to reduce inflation. Crude oil prices also retreated 2% on Tuesday as the United States decided to ease restrictions on Venezuela, the news has raised hopes that the market will receive additional oil supplies.
Microsoft Corp, Apple Inc, Tesla Inc and Nvidia Corp gained between 1.5% and 4.8%, providing the biggest boost to the S&P 500 and the Nasdaq. Banks jumped 3.1%, with Citigroup climbing 7.9%, after Warren Buffett’s Berkshire Hathaway disclosed a nearly $3 billion investment in the US lender.
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