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US stocks closed higher, on Tuesday, following a choppy session, as markets digested a downgraded global outlook from the World Bank and awaited key inflation data.
US stocks have made modest gains after Fed Chair Jerome Powell had said the US central bank may need to make unpopular decisions to reduce inflation, and the World Bank has warned the globe is teetering on the brink of recession.
Tech shares led the market as the World Bank trimmed its global growth forecast to 1.7 percent for 2023, citing the effects of high inflation, rising interest rates and Russia’s invasion of Ukraine.
But the biggest economic release this week as far as investors will be concerned is Thursday’s consumer price index report, expected to show further moderation after big jumps in prices for much of 2022.
The CPI data will be scrutinized for its implications on Federal Reserve policy, with the central bank enacting aggressive interest rate hikes to combat inflation.
Fed Chair Jerome Powell avoided tipping his hand on future policy decisions Tuesday in a speech in Sweden, but said the insulation of the Fed from electoral politics allows it to hike interest rates if needed “without considering short-term political factors.”
The Dow Jones Industrial Average finished up 0.6 percent at 33,704.10. The broad-based S&P 500 gained 0.7 percent to 3,919.25, while the tech-rich Nasdaq Composite Index jumped 1.0 percent to 10,742.63.
Large tech companies generally had a good day with Amazon closing 2.9 percent higher, Netflix up 3.9 percent and Facebook parent Meta rising 2.7 percent.
Coinbase surged 13 percent as it announced it was cutting 950 positions, about 20 percent of its workforce, following the downturn in the cryptocurrency markets.
