Wall Street ended higher on Tuesday, with gains in Delta Air Lines and other travel stocks, while the Federal Reserve began its two-day policy meeting amid investors’ worries about high oil prices and the Middle East conflict. Shares of airlines and travel companies rebounded from losses in recent weeks related to the U.S. and Israeli attack on Iran and surging energy prices.
Delta DAL.N rallied more than 6% and American Airlines Group AAL.O gained 3.5% after both companies raised their revenue guidance for the current quarter. United Airlines rose 3.2%. Norwegian Cruise Line Holdings NCLH.N climbed over 2% and Expedia Group EXPE.O jumped more than 4%.
Concerns of prolonged supply disruptions due to the closure of the Strait of Hormuz shipping route have kept crude prices near $100 a barrel. Worries about high oil prices will be in sharp focus as Fed policymakers weigh inflation concerns against signs of a weakening jobs market. The central bank started its two-day monetary policy meeting on Tuesday and traders expect the Fed to keep borrowing costs unchanged in its decision on Wednesday. Rate futures suggest expectations of one 25-basis-point cut toward the end of the year, according to LSEG-compiled data, down from around two before the war.
Worries about pricey AI-related stocks, along with uncertainty about the Middle East conflict, have dropped the S&P 500 about 4% from its record high close on January 27. The benchmark is trading at about 21 times expected earnings, down from over 23 in November, but still above its average forward price-earnings ratio of 19 over the past five years, according to LSEG data. The Reserve Bank of Australia hiked interest rates for a second straight month, warning of a material risk to inflation due to the Middle East war. Ride-hailing app Uber UBER.N UBER.N rallied 4.2% after announcing plans to roll out robotaxis in 28 cities starting next year, powered by Nvidia’s autonomous driving software.
The S&P 500 financials sector index .SPSY .SPSY rebounded 0.5% from sharp losses in the week before, when worries about private credit quality rattled investors. Asset manager Blackstone BX.N BX.N rose 4.6%, Apollo Global APO.N APO.N gained 5.3% and KKR KKR.N KKR.N rose 3.3%.
The S&P 500 climbed 0.25% to end the session at 6,716.09 points. The Nasdaq gained 0.47% to 22,479.53 points, while the Dow Jones Industrial Average rose 0.10% to 46,993.26 points. Eight of the 11 S&P 500 sector indexes rose, led by energy .SPNY .SPNY , up 1.02%, followed by a 1% gain in consumer discretionary .SPLRCD .SPLRCD . Volume on U.S. exchanges was light, with 16.9 billion shares traded, compared to an average of 19.8 billion shares over the previous 20 sessions.
Energy companies Occidental OXY.N OXY.N and ConocoPhillips COP.N COP.N rose about 1% each, tracking higher crude prices. Honeywell InternationalHON.O HON.O dipped 1.3% after the industrial company said the Middle East conflict could affect its first-quarter revenue. The conflict has also delayed a planned summit between the U.S. and China on the White House’s request.
Eli Lilly LLY.N LLY.N fell nearly 6% after brokerage HSBC downgraded the drugmaker to “reduce” from “hold.” Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX .AD.SPX by a 1.7-to-one ratio. The S&P 500 posted 21 new highs and two new lows; the Nasdaq recorded 51 new highs and 137 new lows.
Reporting by Johann M Cherian and Utkarsh Hathi in Bengaluru, and by Noel Randewich in San Francisco; Editing by Krishna Chandra Eluri, Devika Syamnath, Rod Nickel.
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