Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average rose more than 500 points Tuesday on signs the Federal Reserve is at least considering a rate cut and on positive comments about trade from Chinese officials.
  • Uber Technologies (UBER) shares rose as investors reacted to a series of analysts' recommendations for the ride-sharing company following its $82 billion listing on the New York Stock Exchange last month.
  • Tiffany  (TIF - Get Report) beat Wall Street's first-quarter earnings expectations, but same-store sales fell sharply amid a "dramatic" decline in foreign tourist spending.

Wall Street Overview

Stocks ended sharply higher Tuesday as investors took heart at the possibility of an interest rate cut from the Federal Reserve and on positive trade talk from China.

The Dow Jones Industrial Average climbed 512 points, or 2.06%, to 25,332, the S&P 500 rose 2.14% and the tech-heavy Nasdaq rebounded from Monday's drubbing, advancing 2.65% and moving out of correction territory.

The major indexes had their second-best day of the year.

St. Louis Federal Reserve President James Bullard said that a "darkened" narrative on global trade could mean a U.S. economy "that is expected to grow more slowly going forward, with some risk that the slowdown could be sharper than expected due to ongoing global trade regime uncertainty." He added that a "downward policy rate adjustment may be warranted soon."

Fed Chairman Jerome Powell, speaking Tuesday at a conference held by the Chicago Federal Reserve Bank, said the Fed was "closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective."

"To be sure his comments are vague, but I think it's safe to say this is the first time Powell himself has opened the door to an actual rate cut," said Mike Loewengart, vice president of investment strategy at E*Trade. "Given the ongoing uncertainty on the both the interest rate and trade front, any clarity will likely be welcomed by the market. A lot of market-watchers will be reading the tea leaves from this week's jobs data, which could hold significant weight for the Fed's next rate move."

CME Group futures prices suggest at least a 50/50 chance of a rate cut in July, with two more easing moves priced in between now and the end of 2019.

Meanwhile, China's Commerce Ministry said trade differences between the world's two biggest economies should be resolved through dialogue.

"The Chinese side always believes that the differences and frictions between the two sides in the economic and trade field will ultimately need to be resolved through dialogue and consultation," a spokesperson from the Ministry of Commerce said in a statement.

However, China's Ministry of Foreign Affairs issued a safety warning for Chinese citizens and companies in the U.S., CNBC reported, while the Ministry of Culture and Tourism also issued an alert cautioning Chinese citizens that "shootings, robberies and theft have occurred frequently in the U.S."

In other trade news, Republican lawmakers are discussing whether they may have to vote to stop the new tariffs on Mexican goods threatened by President Trump, The Washington Post reported, citing people familiar with the matter. The report said GOP lawmakers are worried about the ramifications for businesses and consumers of the tariffs.

Secretary of Commerce Wilbur Ross issued a statement Late Monday saying he had met with Mexico's Minister of Economy Graciela Marquez to discuss bilateral trade and the United States' upcoming plan to tariff Mexican goods at 5% and "reiterated the president's message that Mexico needs to do more to help the U.S. address immigration across our shared border."

Separately, the Commerce Department said factory goods orders declined 0.8%, pulled down by soft demand for transportation equipment, computers and electronic orders, and primary metals.

Tech stocks led the Nasdaq's fall into correction territory Monday, as news accounts said various government agencies will or plan to investigate such tech heavyweights as Facebook (FB - Get Report) , Apple (AAPL - Get Report) , Alphabet (GOOGL - Get Report) , and Amazon (AMZN - Get Report) . Shares of all the companies rose Tuesday.

The House Judiciary Committee unveiled a sweeping "top-to-bottom' review of unnamed tech companies late Monday, the first such probe by Congressional lawmakers, as reports of a dual effort from the Department of Justice and the Federal Trade Commission to tackle the perceived dominance and potential abuses of tech giants.

Uber Technologies (UBER) shares rose 3.6% to $42.75 as investors reacted to a series of analysts' recommendations for the ride-sharing company following its $82 billion listing on the New York Stock Exchange last month. Uber is Real Money's Stock of the Day.

Tiffany  ( TIF - Get Report)  beat Wall Street's first-quarter earnings expectations, but same-store sales fell sharply amid a "dramatic" decline in foreign tourist spending. Shares climbed 2.6% to $92.51.
 
Shares of Box Inc. ( BOX - Get Report)  tumbled 4.2% to $17.18 after the cloud storage provider posted better-than-expected first-quarter results but offered cautious revenue guidance.

Shares of CVS Health (CVS - Get Report) rose 2.3% to $54.62 as the healthcare company said it expects the integration of Aetna will drive synergies of $300 million to $350 million in 2019 and about $800 million in 2020.

 

Facebook, Apple, Alphabet, CVS, and Amazon are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.