Stocks rise as investors appreciate Fedspeak

U.S. stocks advanced at the open on Tuesday after Wall Street weighed in on open rate talks by Federal Reserve officials and comments from Chairman Jerome Powell at an event hosted by the Swedish central bank.

The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) were each up 0.2% at the start of the session. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3%.

Powell made the case for the independence of the US central bank in his speech at the Central Bank Independence Symposium in Stockholm, Sweden, on Tuesday. He argued that stable inflation is the cornerstone of a healthy economy and that the Fed can be required to take necessary, even if often unpopular, action.

“The case for monetary policy independence is in the benefits of isolating monetary policy decisions from short-term political considerations,” he said.

In special market action, shares of Coinbase ( COIN ) rose 4% at the open after the cryptocurrency exchange said it would cut about 1,000 jobs as part of a restructuring plan. The company expects to incur approximately $149 million to $163 million in restructuring costs. The move will mark the third round of layoffs for Coinbase since last year.

Billionaire Richard Branson’s Virgin Orbit Holdings ( VORB ) shares fell 20% after one of the company’s rockets failed to reach its target orbit due to a technical fault.

Investors continued to watch beleaguered retailer Bed Bath & Beyond ( BBBY ) as it reported earnings that missed estimates just a week after the company disclosed it was considering bankruptcy due to financial difficulties.

“As we shared last week, we continue to work with advisors as we consider all strategic alternatives to achieve our near and long-term goals,” CEO Sue Gove said in an update Tuesday, adding that “multiple avenues are being explored.”

Shares of Bumble ( BMBL ) rose more than 4% in early trade after KeyBanc upgraded the women-founded dating app from Sector Weight to Overweight and said the “competitive environment appears stable and economic pressures are easing.”

Shares of Oak Street Health ( OSH ) jumped 29% on Monday after Bloomberg News reported that CVS Health is exploring buying the operator of primary care centers.

Traders work on the floor of the New York Stock Exchange during midday trading on January 09, 2023 in New York City. (Photo by Michael M. Santiago/Getty Images)

Tuesday’s moves came after a mixed start to the week that saw the tech-heavy Nasdaq extend gains from Friday’s rally, while the other two major averages failed to sustain momentum. The Nasdaq rose 0.6% on Monday, while the S&P 500 and Dow closed up 0.1% and 0.3%, respectively, after dovish statements from two Federal Reserve officials.

San Francisco Fed President Mary Daly told the Wall Street Journal in a live interview that she expects policymakers to raise interest rates above 5%, with the final rate ultimately dependent on the path of inflation.

Atlanta Federal Reserve President Raphael Bostic echoed that sentiment, saying the U.S. central bank should raise interest rates above 5% early in the second quarter and then keep them there “for a long time.”

“I’m not the main guy,” said Bostic, speaking Monday at the Rotary Club of Atlanta. “I think we need to pause and hang in there and let the politics work.”

Thursday will bring investors December’s Consumer Price Index (CPI) — perhaps the most important economic release of the month and the last important reading before Federal Reserve officials meet Jan. 31-Feb. 1 to deliver the next percentage increase.

Economists expect headline CPI to rise 6.6% in December from a year earlier, down from the 7.1% increase seen in November, according to Bloomberg data. On a monthly basis, the CPI probably remained flat.

The report is likely to change bets on whether the Federal Reserve will raise interest rates by 0.25% or 0.50% early next month.

Alexandra Semenova is a correspondent for Yahoo Finance. Follow him on Twitter @alexandraandnyc

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