Stock market today: Dow gains, Bed Bath & Beyond rises

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Stocks rebound on a quiet Tuesday ahead of Labor Day as markets digest a recent Fed-induced decline. Cooling rates and energy prices help.

Shortly after the opening, the

Dow Jones industry average
is up 68 points or 0.2%. That

S&P500
is up 0.2% and the

Nasdaq Composite
has gained 0.4%.

“Equities markets rebounded on Tuesday after a bumpy couple of weeks as investors grew nervous about the economic impact of the tightening,” writes Craig Erlam, senior market analyst at Oanda.

It’s been a really tough few weeks. The S&P 500 is down just over 6% from its mid-August peak on Tuesday after a summer rally, with weakness driven by Fed Chair Jerome Powell’s emphatic speech that shattered hopes of a Fed pivot once and for all destroyed (we hope). The central bank fights inflation.

The latest murmur from the central bank came from Minneapolis Fed President Neal Kashkari, who told Bloomberg on Monday he was “happy” to see the way Powell’s Jackson Hole speech was picked up by a sell-off in the stock market. Kashkari said this is a sign that investors understand how serious the Fed is about bringing inflation down to 2%.

While this has brought interest rates close to their multi-year highs, they are not surpassing those levels. The 2-year Treasury yield is trading at 3.45%, right near its high for the year. As US interest rates pause their recent rise, the dollar has also stumbled. At 108, the

US Dollar Index,
is just below its decade high, but lower US interest rates make the country’s fixed income less attractive.

The interest rate pause and the dollar are helping the stock market rally on a Tuesday. “Stock futures enjoy a solid oversold recovery this morning, with both Treasury yields and the Dollar Index falling from their recent highs,” writes Tom Essaye of Sevens Report.

In line with pausing interest rates, inflation may be cooling for good.

The price of the Dutch TTF gas futures contract fell 2% in the last few hours after it was announced that the European Union plans to intervene to lower the price of gas. The price of WTI crude oil is also down more than 2% to below $95 a barrel.

That’s helping stocks rally, wrote Andrew Brenner of NatAlliance Securities.

Every possible jump will be tested on Friday. Then the Bureau of Labor Statistics releases the August jobs report. Economists expect 318,000 jobs were added, down from 528,000 in July. A cooling labor market could bode well for the stock market as it could mean that the Fed could slowly take its foot off the brakes.

“Employment is key to what markets will do this Friday,” Brenner wrote.

Once again it’s a world where bad news is good news.

Here are some stocks moving on Tuesday:

baidu

(Ticker: BIDU) fell 3% after the Chinese internet giant released earnings and earnings that beat Wall Street’s expectations. The group posted earnings of $2.36 per share on sales of $4.4 billion for the three months ended June, comfortably beating analysts’ estimates of earnings of $1.54 per share on sales of $4.3 billion.

bed bath beyond

(BBBY) is up 11% a day ahead of its investors update.

gap

(GPS) stock rose 4.8% after being upgraded from underweight to equal weight by Barclays.

Pinduo

(PDD) stock rose 1.5% after being upgraded to ‘buy from hold’ by HSBC.

American outdoor brands

(AOUT) stock is up 17% after being upgraded from Neutral to Buy by B. Riley Securities.

MakeMyTrip

(MMYT) stock rose 1.9% after being upgraded from Neutral to Buy by Bank of America.

Write to Jacob Sonenshine at [email protected] and Jack Denton at [email protected]