Following a brief decline earlier in the day due to reports that Russian rockets had entered NATO member Poland, the S&P 500 resumed its upward trajectory on Tuesday as attention shifted back to evidence of reducing inflation.
The Nasdaq increased 1.54%, the Dow Jones Industrial Average increased 0.1%, or 28 points, and the S&P 500 increased by 0.8%.
According to the Associated Press, which cited an unnamed U.S. intelligence officer, two errant Russian rockets landed in the NATO nation of Poland and resulted in the deaths of two persons. The national security committee was invited to an urgent meeting by the Polish government.
The reports were deemed “a intentional provocation intended to escalate the situation,” according to the Russian defence ministry, which denied that their missiles had struck Polish soil.
Geopolitical concerns had been initially heightened by the news, which temporarily increased demand for safe-haven Treasuries and the dollar. However, the safe-haven move quickly subsided, and equities began to rise as signals of falling inflation became more apparent.
Following data last week showing decreasing consumer prices, the producer price index increased by 0.2% in October, significantly less than the 0.4% increase anticipated, supporting “the view that peak prices are behind us,” according to a report from Stifel.
According to Investing.com’s Fed Rate Monitor Tool, just 19% of traders now anticipate another 75 basis point rate hike next month, down from 48% the previous week, as a result of the data, which increased expectations for a slower rate hike pace.
Treasury yields fell as tech stocks rose. Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) both saw gains of more than 2%, with the latter garnering the attention of activist investor TCI Fund Management who is urging the tech giant to reduce expenses and increase share repurchases.
Chip stocks also contributed significantly to the overall tech market meltdown, lead by Taiwan Semiconductor Manufacturing (NYSE:TSM) after Warren Buffet’s Berkshire Hathaway (NYSE:BRKa) purchased a stake in the company for more than $4 billion in the third quarter.
The “Oracle of Omaha” increased its holding in Taiwan Semiconductor, boosting confidence in the chip industry and causing a wave of optimistic wagers on other chipmakers like Advanced Micro Devices (NASDAQ:AMD), NVIDIA (NASDAQ:NVDA), and Qualcomm (NASDAQ:QCOM).
Walmart (NYSE:WMT), which upgraded its full-year guidance in response to third-quarter earnings that above Wall Street expectations, surged 7%, sparking a sea of green among retail stocks.
Robust performance in Walmart’s food division, supported by strong consumer demand for lower-priced goods, was the primary factor in the results beating expectations.
Home Depot (NYSE:HD) increased by more than 1% following the release of quarterly results that above forecasts, but maintained guidance lessened the shine of the results “given the elevated investor expectations surrounding the quarter,” according to a note from Goldman Sachs.