Investing.com – Wall Street climbed to new highs on Tuesday amid a risk-on attitude that began with last Friday’s strong employment report and continued on the positive start to earnings season, while oil shot up around 4% on a bullish outlook for global demand.
At 15:46GMT, or 11:46 AMET, the Dow 30 gained 118 points, or 0.6%, the S&P 500 rose 16 points, or 0.76%, while the tech-heavy Nasdaq Composite traded up 39 points, or 0.78%.
The S&P 500 broke through record highs seen in May 2015 and continued higher as global political turmoil seemed to fade to the background.
Outside the U.S., Japanese stocks had continued on Tuesday to celebrate policy decisions to implement additional stimulus in order to support the economy, while Brexit fears receded amid political progress with imminent naming of a new Prime Minister, a key step on the path to outlining trade deals in the aftermath of the U.K.’s decision to leave the European Union.
The second quarter earnings season got off to a positive start as Alcoa (NYSE:AA) beat consensus on both top and bottom lines and the company’s shares soared 5% on Tuesday. The aluminum maker is traditionally considered to kick off the reporting season from its days when it formed a part of the Dow.
Shares in Seagate Technology (NASDAQ:STX) soared more than 20% on an improved guidance and plans to cut its workforce.
Not all earnings news was positive, as Fastenal Company (NASDAQ:FAST) missed estimates and fell around 4%.
Analysts were suggesting however that despite expectations for S&P 500 companies to show a fourth consecutive decline in earnings, the trough in the profit recession had reached a trough in the first three months of the year.
In any case, investors will undoubtedly focus on bank earnings with JP Morgan’s release on Thursday, followed by Citigroup and Wells Fargo on Friday, as well as other financial companies such as BlackRock and PNC Financial Services.
On Tuesday’s economic calendar, wholesale inventories rose slightly less than expected in May, suggesting investment in stocks would do little to contribute to economic growth in the second quarter.
Job openings in the U.S. fell more than expected in May in what could perhaps be considered a sigh of relief from market participants betting that the Federal Reserve (Fed) will hold off on rate hikes this year. JOLTs, as it is known, has often been cited by Fed chair Janet Yellen often cites the survey when assessing the state of the labor market.
Cleveland Fed chief Loretta Mester did not comment on the economy or interest rates in her speech in Sydney, Australia, while Fed governor Daniel Tarullo stuck to the topic of “shadow banking” in his own appearance on Tuesday.
St. Louis Fed president James Bullard repeated his call for one rate hike this year, but did admit that “risks associated with this projected policy rate are likely to the upside.”
Markets continued to disagree with the Fed’s call for at least one hike this year. Not to mention that Fed fund futures continued to price in a 100% chance that the U.S. central bank would make no move in its July 27 decision, odds for an increase at the December meeting were still only at 41.5% on Tuesday.
Minneapolis Fed president Neel Kashkari was expected to give remarks on the economy and the role of the monetary authority after markets close at 21:30GMT, or 5:30PM ET.
Meanwhile, oil jumped 4% on Tuesday after the Organization of the Petroleum Exporting Countries (OPEC) forecast higher demand for its crude next year as the global surplus fades.
U.S. crude futures jumped 4.07% to $46.58 by 15:49GMT, or 11:49AM ET, while Brent oil soared 4.37% to $48.27.