Wall Street's main stock indexes gained on Tuesday supported by retreating Treasury yields, while investors awaited a key inflation print later in the week that could help shape the Federal Reserve's stance on interest-rate cuts this year.
The focus will be on the March reading of the U.S. Consumer Price Index (CPI), due on Wednesday, that is expected to show a rise in headline inflation to 3.4 per cent year-on-year, from 3.2 per cent in February.
The core figure, which excludes volatile components such as food and energy, is expected to ease to 3.7 per cent year-on-year, versus 3.8 per cent in February.
"I would not be surprised, given the underlying strength in the economy, that it (CPI) comes in a little warmer than expected, but that doesn't seem to be particularly worrisome for investors," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
"The overarching theme is that it will cool and that the Federal Reserve will eventually be able to cut interest rates."
Amid signs of a robust U.S. economy, investors have been scaling back expectations for how much the central bank will cut interest rates by this year. Current bets of around a 60-basis-point easing are the lowest since October, according to LSEG data, compared to about 150 bps priced in at the start of 2024.
Traders see a nearly 53 per cent chance of an at-least 25 bps cut in June, according to the CME's FedWatch Tool, down from 64 per cent last week.
Cushioning equities, the yield on the benchmark 10-year Treasury note fell, easing from the November high it had hit in the previous session. It was last at 4.3837 per cent.
All three major indexes had a flat finish on Monday, as a rise in Treasury yields after last week's blowout jobs report kept gains in check.
Minutes of the Fed's March meeting - where it stuck to its guidance of three rate cuts this year - are due later in the week and could be key in gauging where the central bank stands on policy easing.
Alphabet rose 1.4 per cent after Google revealed the details of a new version of its data center artificial intelligence chips.
At 9:36 a.m. ET, the Dow Jones Industrial Average was up 71.49 points, or 0.18 per cent, at 38,964.29, the S&P 500 was up 15.88 points, or 0.31 per cent, at 5,218.27, and the Nasdaq Composite was up 63.11 points, or 0.39 per cent, at 16,317.07.
All 11 major S&P 500 sectors were trading higher, with real estate and communication services among the top gainers.
Other megacap growth stocks including Amazon.com, Meta Platforms and Microsoft rose between 0.2 per cent and 0.5 per cent.
Digital Realty Trust gained 1.9 per cent after Wells Fargo upgraded the data-center operator to "overweight" from "equal weight", saying the company could accelerate leasing volumes in 2024.
Cryptocurrency and blockchain-related stocks declined in early trading, tracking falling bitcoin prices. Exchange operator Coinbase Global, crypto miner Marathon Digital and software company MicroStrategy dipped between 0.1 per cent and 4.2 per cent.
Advancing issues outnumbered decliners by a 4.07-to-1 ratio on the NYSE and by a 2.39-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and no new lows, while the Nasdaq recorded 32 new highs and 19 new lows. - Reuters