U.S. stocks edged higher Tuesday, with the Dow Jones Industrial Average and S&P 500 index on track for a record close, as the Senate passed a $1 trillion infrastructure bills and investors await data due this week on inflation.
What are markets doing now?
rose 130.64 points, or 0.4%, to 35,232.49.
The S&P 500
was up 8.07 points, or 0.2%, at 4,440.42.
The Nasdaq Composite
edged down 47.88 points, or 0.3%, to 14,812.29.
On Monday, the Dow industrials
fell 106.66 points, or 0.3%, to end at 35,101.85. The S&P 500 index
fell 4.17 points, or 0.1%, to finish at 4,432.35. The Nasdaq Composite Index
rose 0.2% to close at 14,860.18, or 24.42 points higher.
What’s driving the market?
Stocks pushed mostly higher though the delta variant of coronavirus and its potential impact on global economic growth remained in focus.
The gains come as the Senate on Tuesday voted 69-30 to approve a bipartisan infrastructure bill, sending the $1 trillion measure to the House of Representatives for its approval. The bill, known as the Infrastructure Investment and Jobs Act, calls for $550 billion in new public-works spending above what already was expected in future federal investments, including $110 billion for roads, bridges and other projects, as well as $66 billion for rail, $65 billion for broadband internet and $55 billion for water systems.
The Global X U.S. Infrastructure Development exchange-traded fund
jumped 2% Tuesday and is up nearly 28% so far in 2021.
A fight looms, however, over a $3.5 trillion, Democratic-backed package of additional spending that House Democrats have said must first be passed under budget reconciliation before considering the infrastructure package.
Meanwhile, inflation data, including the release Wednesday of the July consumer-price index, were expected to be in the spotlight.
The CPI reading could affect the timing of the Federal Reserve’s decision to set out a road map for tapering its monthly asset purchases at either the central bank’s Jackson Hole, Wyoming, symposium or the September policy meeting, said Fawad Razaqzada, analyst at ThinkMarkets, in a note.
Economists look for year-over-year inflation to ease to 5.3% in July from 5.4% in June, with the core reading, which excludes volatile food and energy prices, seen easing to 4.3% from 4.5%, he noted.
“If actual numbers come in above these expectations, then we may finally see the stock markets start to fear inflation and the tapering that would come with it,” Razaqzada said, in a note.
“So far, dips in the indices have been bought and the S&P 500 is on a long winning streak. But further improvement in employment data or a jump in inflation would probably bring tapering forward, giving equity market bulls an excuse to lighten up their positions,” he said.
A weak reading, however, could see markets break to new highs on expectations tapering would be pushed back.
Boston Fed President Eric Rosengren said in an interview with the Associated Press late Monday that the central bank should announce in September that it will begin reducing its $120 billion in purchases of Treasury and mortgage bonds “this fall.”
U.S. small businesses confidence fell in July, after hitting the highest level since last November’s presidential election in June, according to a survey released by the National Federation of Independent Business on Tuesday.
Which companies are in focus?
Shares of AMC Entertainment Holdings
trimmed an early surge but remained up 1.3% after the movie-theater chain reported a narrower quarterly loss late Monday, and a deal with AT&T’s
Warner Bros. over showing its movies in theaters before streaming.
Casper Sleep Inc.
on Tuesday reported a second-quarter loss that widened unexpectedly from a year ago, while revenue topped forecasts, as increased raw materials, freight and labor costs hampered the mattress and bedding company’s ability to meet demand. Shares fell 13%.
What are other markets doing?
The yield on the 10-year Treasury note
rose 2.9 basis points to 1.342%. Yields and debt prices move in opposite directions.
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, rose 0.1%.
Oil futures bounced, with the U.S. benchmark
up 3.4% at $68.80 a barrel after ending at a three-week low in the previous session. Gold futures
edged higher, rising 0.3% to $1,731.60 an ounce.