Dow: +599.10…
Nasdaq: +367.40… S&P: +89.34…
The S&P 500 rose 2.1% on Tuesday, providing investors relief as oil prices extended their pullback, and PPI data for February was better than feared. The Nasdaq gained 2.9%, the Dow gained 1.8%, and the Russell 2000 gained 1.4%.
Crude futures fell 6.5%, or $6.66, to $96.16/bbl, as growth concerns lingered due to China’s recent COVID-19 lockdowns. The market, however, overlooked the growth-concern aspect, perhaps because it welcomed the 26% retracement in oil prices since last week’s highs, or because it was simply primed for a bounce.
Much of today was also short covering in front of the Fed. Many short-sellers have had gains and decided to cover and play it safe. Some absolutely crushed stocks like CROX, CVNA, and UPST caught bounces today. Many others too. They were getting oversold.
The rally today was a combination of a few things, but the fact that it was strong a day in front of the Fed tells me that maybe a lot of what the Fed will do is baked in.
My personal request would be a 50bp increase with some accommodative language. A 25 bp increase doesn’t seem like enough, but would probably be bullish because the market lives for low rates no matter what.
I have some pullback plays that I’m starting to like, but I won’t do anything until after the Fed, maybe into Thursday.