By Yasin Ebrahim
Investing.com – The S&P 500 gave up some gains Tuesday, as rising geopolitical tensions partly offset optimism in the wake of growing bets for a slower pace of Federal Reserve rate hikes following fresh data pointing to further signs of easing inflation pressures.
The S&P 500 rose 0.4%, the Dow Jones Industrial Average fell 0.2%, or 102 points, the Nasdaq rose 1%, but was up more than 2% earlier in the day.
Two stray Russian rockets landed and killed two people in the NATO state of Poland, Associated Press reported, citing an unnamed U.S. intelligence official. The news stoked geopolitical tensions and forced investors to ease some of their bullish bets. The Polish government called an urgent meeting of the national security committee.
The producer price index rose 0.2% in October, well below the 0.4% rise expected, reinforcing “the notion that peak prices are behind us,” Stifel said in a note, following data last week showing slowing consumer prices.
The data added to growing expectations for a slower pace of rates, with just 19% of traders now expecting another 75 basis point rate hike next month, down from 48% in the previous week, according to Investing.com’s Fed Rate Monitor Tool.
Treasury yields slipped, helping tech stocks advance. Meta Platforms (NASDAQ:META) and Alphabet (NASDAQ:GOOGL) jumped more than 3%, with the latter attracting the attention of activist investor TCI Fund Management calling on the tech giant to cut costs and boost share buybacks.
Chip stocks also played a big role in the broader melt-up in tech, led by Taiwan Semiconductor Manufacturing (NYSE:TSM) after Warren Buffet’s Berkshire Hathaway (NYSE:BRKa) took a more than $4 billion stake in the chipmaker during the third quarter.
The stake in Taiwan Semiconductor from the ‘Oracle of Omaha,’ boosted sentiment on the chip sector, sparking a wave of bullish bets on other chipmakers including Advanced Micro Devices (NASDAQ:AMD), NVIDIA (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM).
Walmart (NYSE:WMT) rallied 7%, triggering a sea of green in retail stocks after upgrading full-year guidance following third-quarter results that topped Wall Street estimates.
The better-than-expected results were driven by strength in Walmart’s food business, underpinned by strong consumer demand for lower-priced groceries.
Home Depot (NYSE:HD) gained 0.5% after reporting quarterly results that topped estimates, though unchanged guidance took some gloss off the results “given high investor expectations surrounding the quarter,” Goldman Sachs said in a note.