US stocks gained modest ground on Tuesday, navigating a complex mix of rising oil prices and anticipation for a key central bank meeting. The Dow Jones Industrial Average rose roughly 0.3%, building on a tentative rebound from the previous session. The S&P 500 and Nasdaq Composite also climbed, picking up 0.3% and 0.4% respectively.
Fresh attacks in an ongoing conflict drove a significant rally in energy markets. Oil prices jumped as critical infrastructure was targeted, with Brent crude futures briefly nearing $104 a barrel. West Texas Intermediate crude also rose, trading just under $94. At the same time, US diesel prices topped $5 a gallon for the first time in years, a direct result of major supply disruptions.
Doubts surround the prospects of reopening a vital shipping waterway that has been effectively blocked. Several allies of the US have reportedly rebuffed a request to form a multinational effort to escort vessels through the strait, which is crucial for global tanker traffic.
This surge in energy prices is complicating the global economic outlook. Just as inflation pressures seemed to be easing, the new spike is creating a headache for the Federal Reserve and other major central banks that were preparing to pivot toward interest rate cuts. The Fed began its two-day policy meeting on Tuesday, with its decision and accompanying commentary expected the following day. Expectations for an immediate rate cut have faded significantly, with markets now pricing in near-certain odds that rates will remain at their current levels.
On the corporate front, investors were closely watching a major tech conference. The CEO of a global chip behemoth announced a slew of new deals and projected massive future sales, signaling continued robust demand for its products.
In other market moves, shares of a prominent plant-based food company dropped more than 7% after it announced a delay in filing its annual report. The company also released preliminary quarterly revenue that fell short of Wall Street’s estimates. Once a high-flying stock, the company has struggled in recent years as consumer demand for its core products failed to meet initial expectations. The stock is now trading at a fraction of its former value and recently received a delisting warning from its exchange.
Meanwhile, Bitcoin traded near $74,000, with strategists highlighting its relative strength despite broader market jitters. Analysts noted that the world’s largest digital token has significantly outperformed both gold and major stock indices since the conflict began, rising 10%. This resilience is attributed in part to substantial inflows into new exchange-traded funds, driven by increasing allocations from wealth managers and large institutional funds.
