Stocks Edge Higher as Inflation Report Looms

Stocks ticked higher in quiet trading on Wall Street Tuesday, ahead of some potentially market-moving reports scheduled for later in the week. The S&P 500 rose 27.16 points, or 0.7%, to 3,919.25 after drifting between small gains and losses through the day. The Dow Jones Industrial Average gained 186.45, or 0.6%, to 33,704.10, and the Nasdaq composite climbed 106.98, or 1%, to 10,742.63. The stock market has had a positive start to 2023 due to hopes that cooling inflation and a slowing economy may convince the Federal Reserve to ease off its markets-shaking hikes to interest rates. Investors were hoping for some clues about where the Fed is heading from its chair, Jerome Powell, who made remarks at a forum in Stockholm on Tuesday, the AP reports. But he gave little news about rates.

Big US companies will begin showing investors later this week how much profit they made during the last three months of 2022. Hot inflation has been squeezing customers’ wallets and raising costs for businesses, threatening their earnings. Macy’s and several businesses have already given warnings about their results for the fourth quarter of 2022 and into 2023. Troubled home goods retailer Bed Bath & Beyond on Tuesday reported weaker revenue for its latest quarter than analysts expected, though the size of its loss wasn't as bad as Wall Street forecast. Its stock rose 27.8% after it also announced cost cuts to save cash as it considers a bankruptcy filing, among other options.

Job cuts are also continuing at tech-oriented companies, a notable soft spot in what's otherwise been a healthy US job market. The continuing collapse for crypto pushed Coinbase to say it's cutting 20% of its workforce. The stock rose 13%. The next big marker for the market is likely Thursday’s update on how bad inflation was last month at the consumer level. Economists expect it to show US inflation slowed further to 6.5% from 7.1% in November and from a peak of more than 9% in the summer. A worse-than-expected reading could dash the building hopes on Wall Street that the Fed may stop its hikes soon and perhaps even cut rates by the end of the year. Some investors see the economy successfully walking the tightrope of slowing enough to snuff out high inflation but not so much as to cause a painful recession. (More stock market stories.)