US Stocks Gain for 3rd Straight Day ahead of Inflation Data

US stocks gained on Tuesday for a 3rd straight day while bond yields slid ahead of an anticipated US inflation data report due out on Wednesday.

The indexes closed higher for the 3rd day in a row, restoring losses from correction levels seen last week. On Thursday, the Dow, Nasdaq, and S&P 500 all closed at least 10% below record highs set last month.

After spending some time in negative territory after the opening bell, the 3 major indexes rebounded before the closing bell to post strong gains.

“It feels better than yesterday,” said Chris Low, chief economist at FTN Financial. He also noted that volatility remains elevated.

“We’ll still have ups and downs and in the next week or 2, we could retest the lows. But it feels a little better,” he said.

The S&P 500 rose 0.28% to close at 2,663.33, with consumer cyclical and non-cyclical and financial sectors leading the benchmark index. Energy stocks, however, dropped to the bottom with oil prices still struggling.

Among the 70% of the S&P 500 companies that have reported profits, nearly 78% of them beat expectations, according to sources. That was above the 72% average beat-rate in the past 4 quarters.

The Nasdaq Composite finished the day up 0.45% to 7,031.58. Among the best performers were Nvidia and Amazon as both stocks advanced about 2%.

The Dow Jones Industrial Average rose 0.18% to close at 24,645.24. Goldman Sachs and 3M were the best performers to the 30-stock index, both jumping 0.9%.

Meanwhile, investors remained anxious ahead of inflation data from the US. Economists predict the Consumer Price Index to rise to an annual rate of 1.9% in January, down from 2.1% a year earlier.

The 10-year Treasury note yield slid 2.844% after rising on Monday to a 4-year high of 2.092%.

If inflation continues to rise, the equity market will also continue to struggle, said Nick Clay, lead manager of the BNY Mellon Global Equity Higher Income Fund.

“If worries about inflation come true, the problem is that central banks will have no choice but to raise rates, which won’t just have an impact on the equity markets but also on the real economy,” Clay said.

In commodities, Brent futures hit a 2-month low early, but the benchmark settled up 13 cents at $62.72 a barrel. US West Texas Intermediate crude futures dropped 10 cents to settle at $59.19 a barrel.

US gold futures for April delivery settled up $4, or 0.3%, at $1.330.40, while Copper futures advanced 2.5%.

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