Stocks climbed higher Tuesday as oil prices declined after multiple sessions of increases. The Dow Jones Industrial Average climbed nearly 130 points, while the S&P 500 Index and Nasdaq Composite added about 1% and 1.5%, respectively.
Here's how the market settled on Tuesday:
S&P 500 Index (NYSE: SPY): +0.97% or +55.19 points to 5,751.13
Dow Jones Industrial Average (NYSE: DIA): +0.3% or +126.13 points to 42,080.37
Nasdaq Composite Index (NASDAQ: QQQ): +1.45% or +259.01 points to 18,182.92
Hurricane Milton:
Hurricane Milton has the potential to cause as much as $175 billion in damage, according to Wall Street analysts, as Florida prepares for the storm to make landfall as soon as Wednesday.
"While too early to make insured loss estimates, a major hurricane impact in one of Florida's most heavily populated regions could result in mid-double-digit billion dollar loss," Jefferies Equity Analyst Yaron Kinar and others said in a note, quoted by CNBC. "A 1-in-100 year event is estimated by some to result in $175 [billion] in losses for landfall in the Tampa region, and $70 [billion] in losses in the [Fort] Myers region."
Refiner Stocks including Marathon Petroleum (NYSE: MPC), Valero (NYSE: VLO), and Phillips 66 (NYSE: PSX) declined Tuesday as Hurricane Milton is expected to impact gasoline demand in the coming days. However, the storm is not expected to disrupt oil infrastructure (there are no refineries in Florida).
Disney (NYSE: DIS) earnings is expected to be impacted by park closures and disruptions from Hurricane Milton, according to Goldman Sachs. The firm projects that earnings before interest and taxes for its Parks and Experiences segment could be reduced by about $150 million to $200 million in its current 2025 fiscal first quarter. Goldman cut its estimates for Disney's fiscal 2025 earning per share to $5.14 to $5.22.
FedWatch:
Federal Reserve Governor Adriana Kugler said Tuesday that she is currently monitoring potential threats to U.S. employment and the broader economy both domestically and abroad as policymakers prepare for their next decision in November.
"I am closely monitoring the economic effects from Hurricane Helene and from geopolitical events in the Middle East, since these could affect the U.S. economic outlook. If downside risks to employment escalate, it may be appropriate to move policy more quickly to a neutral stance," Kugler said in remarks for a conference in Germany.
Kuglar added that she "strongly supported" the central bank's half percentage point rate cut in September, but cautioned that the Fed may need to slow the pace of further cuts if inflation continues to weigh on the economy.
Boston Federal Reserve President Susan Collins said Tuesday she expects more interest rate cuts in the future as the labor market loosens and inflationary pressures wane.
"My confidence in the disinflation trajectory has increased -- but so have the risks of the economy slowing beyond what is needed to restore price stability," Collins said in remarks before bankers in Boston. "Further adjustments of policy will likely be needed."
In the News:
Berkshire Hathaway (NYSE: BRK.A) offloaded another chunk of its Bank of America (NYSE: BAC) stake, according to a regulatory filing, continuing its streak of sales since mid-July. Warren Buffett's conglomerate sold 9.6 million shares of the bank over the past three trading days, totaling about $383.0 million and bringing its stake to 10.1%. Once its stake falls below 10%, Berkshire will no longer be required to disclose related transactions.
On the Earnings Front:
PepsiCo (NASDAQ: PEP) reported better-than-expected fiscal first-quarter earnings, but cut its full-year guidance as recalls, weakening U.S. demand and some international market business disruptions weighed on the food and beverage giant's quarter, according to CEO Ramon Laguarta.
The company now expects a low-single-digit rise in organic revenue for its full year 2024, below its previous outlook of 4% growth. Pepsi also reiterated its outlook for an increase of at lease 8% for its core constant currency earnings per share.
For Wednesday:
Market participants will react to a series of Fedspeak on Wednesday.