Stocks were mostly higher Tuesday after optimism over a U.S. recovery drove the S&P 500 to a sixth straight day of gains and as investors turned their gaze to the Federal Reserve for the central bank’s projections on the economy.
Stocks held higher even after U.S. retail sales in February declined more than forecast as winter storms in Texas and the southwest halted consumer spending. Retail sales fell 3% from an upwardly revised 7.6% jump in January.
The Dow Jones Industrial Average fell 65 points, or 0.2%, to 32,888. The blue-chip index closed higher Monday for a seventh straight session. The S&P 500 rose 0.13% and the Nasdaq gained 0.54%.
The Dow and S&P 500 finished at record highs Monday led by technology shares. The Nasdaq rose 1.05%.
Investors have been keeping a close eye on rising Treasury yields with many believing inflation will move higher following the signing of a new $1.9 trillion stimulus bill. The 10-year Treasury traded at 1.592% early Tuesday.
Fears of rising inflation likely will be on the minds of investors when the Federal Reserve begins a two-day meeting on Tuesday. Federal Reserve Chairman Jerome Powell has said inflation likely will rise as the economy recovers but thinks it will be temporary.
Powell is expected by economists to indicate the Fed will tolerate higher inflation to get the U.S. back to full employment.
“The short-term key to this market continues to be interest rates,” according to Real Money contributor James “Rev Shark” DePorre. “The Federal Open Market Committee is starting its two-day policy meeting here on Tuesday and will announce its policy on Wednesday. The market seems to be anticipating that there will be an effort to reassure participants that inflation is under control and no immediate action is needed.”
On the virus front, AstraZeneca’s (AZN) – Get Report COVID-19 vaccine was suspended in more countries on Tuesday, with Sweden being the latest nation to pause its use as European regulators continue to review safety data following reports of dangerous blood clots in some recipients.