Major US stock indices marched higher on Tuesday, inching closer to their all-time peaks, powered by significant advances in technology and healthcare shares. Investors maintained a watchful stance ahead of a crucial set of US economic data releases scheduled for the week, which are expected to provide direction for future interest rate decisions by the Federal Reserve.
Indices Edge Closer to Historic Peaks
The benchmark S&P 500 index rose by 0.2% during late morning trading, positioning itself just below the record high it achieved in late December. The blue-chip Dow Jones Industrial Average demonstrated stronger momentum, climbing 195 points, or 0.4%, building on its record-setting close from the previous day. The technology-heavy Nasdaq Composite index also added 0.1% to its value.
Sectoral Moves: Tech and Healthcare in Focus
The rally was distinctly led by two key sectors. Technology stocks posted some of the most notable movements. E-commerce giant Amazon saw a jump of 2.1%, which helped counterbalance a 1.6% decline in Apple shares. Chipmaker Micron Technology registered a solid gain of 6%. Meanwhile, Nvidia, a bellwether for market sentiment, surrendered its early advances to trade mostly flat.
In the healthcare domain, shares advanced by approximately 1.7%. This surge was significantly aided by Moderna, whose stock climbed 7% after analysts at Bank of America Global Research raised their price target for the company.
Artificial Intelligence Demand Fuels Rally
Enthusiasm for companies linked to artificial intelligence (AI) continued to be a dominant theme driving market action. Sandisk emerged as the day's biggest gainer, surging more than 23%. The company's shares have witnessed a sharp ascent since it was spun off from Western Digital in February last year, fueled by robust demand for data storage hardware essential for AI development. Western Digital's stock also advanced sharply on the same day.
Overall, the market breadth was positive, with at least seven of the S&P 500's eleven primary sectors trading in the green, as per reports.
Commodities, Bonds, and Geopolitical Context
In the commodities market, oil prices took a slight breather after strong gains on Monday. Benchmark US crude oil slipped by 0.2%. Consequently, shares of major oil companies Exxon Mobil and Chevron edged lower following their previous day's rally.
The bond market saw yields move higher. The yield on the benchmark 10-year US Treasury note rose to 4.19%, while the two-year yield climbed to 3.48%. In a sign of some investor caution, traditional safe-haven assets like gold and silver saw buying interest, with gold prices rising 0.8% and silver jumping more than 4%.
Markets appeared to largely overlook geopolitical tensions stemming from the recent capture of Venezuelan President Nicolás Maduro by US forces over the weekend.
All Eyes on US Economic Data
The focus now shifts squarely to a packed calendar of US economic indicators. Key reports on job openings, weekly unemployment claims, and the pivotal monthly non-farm payrolls (jobs report) are due later this week. Additional data on the services sector and consumer sentiment are also awaited.
This data will be critically analyzed by investors seeking clues about the health of the US economy. The insights will be particularly important following recent cautious commentary from Federal Reserve Chair Jerome Powell regarding the timeline for future interest rate cuts. Wall Street currently anticipates that the Fed will hold interest rates steady at its policy meeting scheduled for later this month.
