U.S. stocks opened mostly higher on Tuesday as investors digested economic data and corporate earnings, fueling hopes that the Federal Reserve may cut interest rates in December.
According to The Associated Press, the S&P 500 inched up 0.1% in early trading, even though four out of five stocks in the index were climbing.
The Dow Jones Industrial Average gained 288 points, or 0.6%, while the Nasdaq composite fell 0.3%, reflecting uneven performance among tech-heavy stocks.
Artificial intelligence-linked companies saw notable swings. Alphabet rose 1.6% on continued enthusiasm for its newly released Gemini AI model.
Meanwhile, Alibaba’s U.S.-traded shares bounced between gains and losses after the company reported stronger-than-expected quarterly revenue, driven in part by AI-related growth.
Some semiconductor stocks fell sharply. Nvidia dropped 4.8%, and Advanced Micro Devices fell 7.4% after a report indicated that Meta Platforms is in discussions to purchase AI chips from Alphabet rather than from traditional chip suppliers.
Retail earnings also caused significant market movement. Abercrombie & Fitch surged 20.9% after reporting stronger-than-expected profits and raising its full-year revenue and profit forecast.
Kohl’s jumped 32.4% following a quarterly profit report that surpassed analysts’ expectations. In contrast, Dick’s Sporting Goods fell 3.2% after posting weaker-than-expected profits, with Executive Chairman Ed Stack citing inventory clearance at Foot Locker as part of the slowdown.
Underlying the market’s calm is growing optimism that the Fed will reduce its main interest rate. The central bank has already cut rates twice this year to support a slowing economy, and lower rates can ease pressure across financial markets.
According to CME Group data, traders are now pricing in an almost 85% chance of a December rate cut, a marked increase from last week.
Economic reports were mixed. U.S. retail sales in September came in below expectations, suggesting slower consumer spending.
Wholesale inflation was slightly higher than anticipated, but a key underlying measure showed improvement, easing concerns that a rate cut would worsen inflation.
Bond markets reflected cautious optimism. The 10-year Treasury yield dipped to 4.01% from 4.04% late Monday. Overseas, stock indexes in Europe and Asia rose modestly, echoing the positive sentiment in U.S. markets.
The trading day underscored the balancing act facing investors: weighing uneven earnings, AI-driven tech swings, and the potential for further Fed intervention in a fragile economic environment.
