S&P 500 posts record high finish as Oracle jumps, traders keep rate-cut bets

The day got started with great guns, all three indexes way up until 11 a.m., the Dow up some 300 points, then everything came spilling down until 1 pm, afterwards recovering to the previous morning high before coming down a little after 3 pm.  The Dow up 235 for the day, the Nasdaq 246.  The CPI came in exactly as expected with a 0.4% monthly increase. But here’s the thing – apparently, for today at least, nobody cares anymore.  

As today’s expert put it, “Investors have gotten comfortable with the notion that it’s not about when the Fed will lower rates but rather by how much, and a delay ultimately doesn’t matter. It’s that they will and that a less restrictive environment is coming.”  It will be good news all around if this sentiment really takes hold. Economic data continues to be strong. As the expert added, “I’d rather have a strong economy and slightly elevated interest rates than a weak economy that requires stimulus.”  Interesting that suddenly rates are considered to be “slightly elevated.” Volume remains below the 4-week average at 10.97 billion. 

S&P 500 posts record high finish as Oracle jumps, traders keep rate-cut bets

By Caroline Valetkevitch

Tue March 12, 2024 4:11 PM

DJ: 38,769.66  +46.97         NAS: 16,019.27  -65.84         S&P: 5,117.94  -5.75        3/11

DJ: 39,005.49  +235.83       NAS: 16,265.64  +246.36      S&P: 5,175.27  +57.33     3/12

NEW YORK, March 12 (Reuters) - U.S. stocks ended sharply higher on Tuesday, with the S&P 500 registering a record high close as Oracle shares surged and consumer price data failed to dampen investor hopes of interest rate cuts in the coming months.  Shares of Oracle (ORCL.N), opens new tab reached a record high, a day after it reported upbeat quarterly results and said it is set to make a joint announcement with chip-giant Nvidia (NVDA.O), opens new tab.  Nvidia shares also jumped, and an index of semiconductors (.SOX), opens new tab snapped a two-day losing streak.  The Labor Department reported that the Consumer Price Index (CPI) rose 0.4% last month after climbing 0.3% in January. Excluding volatile food and energy components, consumer prices increased 0.4% in February after rising by the same margin in January.

"Investors have gotten comfortable with the notion that it's not about when the Fed will lower rates but rather by how much, and a delay - whether it happens in May like many were initially hoping or in September - ultimately doesn't matter," said Oliver Pursche, senior vice president and advisor for Wealthspire Advisors in Westport, Connecticut.  "It's that they will and that a less restrictive environment is coming."

Traders now see a 70% chance of the first rate cut coming in June, the CME FedWatch Tool showed, versus 71% ahead of the inflation report.

The Dow Jones Industrial Average (.DJI), opens new tab rose 235.74 points, or 0.61%, to 39,005.4. The S&P 500 (.SPX), opens new tab gained 57.3 points, or 1.12%, at 5,175.24 and the Nasdaq Composite (.IXIC), opens new tab added 246.36 points, or 1.54%, at 16,265.64.

"If you look at economic data, it continues to be pretty strong," Pursche added. "And from my perspective as a consumer, employee and investor, I'd rather have a strong economy and slightly elevated interest rates than a weak economy that requires stimulus."  Producer price data is due later this week.

On the down side, shares of Boeing (BA.N), opens new tab fell. Boeing told employees in a memo on Tuesday that it is adding weekly compliance checks for every 737 factory work area and additional audits of equipment to reduce quality problems.  The U.S. Federal Aviation Administration has curbed Boeing production following the mid-air panel blowout on a new Alaska Airlines <ALK.N> 737 MAX 9 jet on Jan. 5.  Also, U.S. carriers warned that their plans to increase capacity were in doubt due to jet delivery delays from Boeing. 

Volume on U.S. exchanges was 10.97 billion shares, compared with the 12.07 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered decliners on the NYSE by a 1.28-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored decliners.  The S&P 500 posted 48 new 52-week highs and no new lows; the Nasdaq Composite recorded 59 new highs and 118 new lows.