U.S. stocks traded flat on Tuesday as investors awaited a key speech from Federal Reserve Chair Jerome Powell and new PMI business activity data.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average gained 130 points, or 0.3%. The S&P 500 held near flat, while the NASDAQ Composite dipped 13 points, or 0.1%.
On Monday, all three major indexes hit fresh intraday highs. The S&P 500 closed higher for the third straight session, setting another record close.
Powell speech and PMI data in focus
Markets are cautious ahead of Powell’s remarks later today. Investors expect him to provide more clarity on the central bank’s interest rate outlook. The Fed cut rates by 25 basis points last week and signaled at least two more cuts this year, citing labor market weakness. Powell, however, warned that persistent inflation and job resilience could complicate further easing.
Fed officials remain divided. Some have argued that last week’s cut reduces the need for additional moves. Others, like Fed Governor Stephen Miran, have pushed for aggressive reductions. Chicago Fed President Austan Goolsbee said rates could be lowered further if inflation cools.
CME’s FedWatch tool shows markets pricing in a 90% chance of a quarter-point cut in October, and a 75% chance of another in December.
At the same time, attention is on flash PMI data for September. Economists expect the S&P Global composite PMI to hold steady at 54.6, signaling expansion. Manufacturing PMI is seen edging down to 52.2, while services PMI is expected to slip slightly to 54.0.
Corporate earnings and stock movers
Micron (NASDAQ:MU) reports earnings after the bell. Analysts expect strong results, driven by AI-related demand for its advanced memory chips. In August, the company raised its revenue and profit outlook for the quarter.
Nvidia (NASDAQ:NVDA) slipped after a record high in the prior session. The AI chip leader announced a $100 billion partnership with OpenAI for data center supply.
Kenvue (NYSE:KVUE) shares rebounded sharply after hitting record lows. The recovery came despite U.S. President Donald Trump linking its Tylenol drug to autism risk during pregnancy in a White House press briefing.
Firefly Aerospace (NASDAQ:FLY) dropped after posting wider losses and weaker-than-expected revenue in its first results since its Nasdaq listing.
Oil prices bounce back
Crude prices rose after earlier weakness, supported by stronger-than-expected European business activity. Brent crude gained 1% to $67.25, while U.S. West Texas Intermediate rose 1.3% to $63.11.
Eurozone PMI data showed activity expanding for the ninth straight month in September, with growth at its fastest pace in 16 months.
Adding further support, a deal to restart oil exports from Iraq’s Kurdistan was delayed, with producers seeking debt repayment guarantees. Exports of around 230,000 barrels per day have been suspended since March 2023.
The International Energy Agency warned in its latest report that global oil supply is rising quickly. It forecast an expanding surplus by 2026 as OPEC+ and non-OPEC producers boost output.
