U.S. stocks close higher as investors wait for Fed meeting next week

  • World
  • Wednesday, 07 Jun 2023

NEW YORK, June 6 (Xinhua) -- U.S. stocks ended higher on Tuesday as investors waited for the Federal Reserve's monetary policy meeting next week.

The Dow Jones Industrial Average rose 10.42 points, or 0.03 percent, to 33,573.28. The S&P 500 added 10.06 points, or 0.24 percent, to 4,283.85. The Nasdaq Composite Index increased by 46.99 points, or 0.36 percent, to 13,276.42.

Seven of the 11 primary S&P 500 sectors ended in green, with financials and consumer discretionary leading the gainers by rising 1.33 percent and 0.99 percent, respectively. Meanwhile, health and consumer staples led the laggards by losing 0.88 percent and 0.47 percent, respectively.

U.S. stocks finished higher on Tuesday as a rotation into the financial sector bolstered the hope that the breadth of the benchmarks' rally might extend beyond technology. Some investors believe the rally in big tech stocks may be nearing its end while others question if markets have run up too fast on the hype for artificial intelligence (AI).

While there will undoubtedly be individual stocks that deliver accelerating growth from spending on AI this year, "we do not think it will be enough to change the trajectory of the overall cyclical earnings trend in a meaningful way," noted Mike Wilson, Morgan Stanley's chief U.S. equity strategist.

"Instead, it may pressure margins further, as companies decide to invest in AI despite decelerating growth in the near term," said Wilson.

Lacking immediate data to push markets sharply, U.S. stocks drifted mostly on Tuesday as investors waited for the Federal Reserve's next move. The central bank is scheduled to meet next week to determine whether to pause or keep increasing interest rates.

"After a valiant attempt at entering a bull market, stocks are wavering as Wall Street contemplates how much more tightening will we see by the Fed," said Edward Moya, senior market analyst at OANDA, a supplier of online multi-asset trading services.

The Federal Open Market Committee has around 80 percent probability of pausing rate hikes in the upcoming monetary policy meeting, according to data from the CME FedWatch Tool on Tuesday afternoon.

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