US stocks rallied on Tuesday as investors weighed Tim Cook’s exit as Apple (AAPL) CEO and looked ahead to confirmation hearings for Fed Chair appointee Kevin Warsh.
The Dow Jones Industrial Average (^DJI) led gains, up 0.8%. Meanwhile, the S&P 500 (^GSPC) rose 0.3% and the Nasdaq Composite (^IXIC) gained 0.2% on the heels of mild closing losses for Wall Street stocks.
Kevin Warsh’s Senate confirmation hearings are scheduled to begin at 10 a.m. ET. In prepared remarks, the Federal Reserve chair nominee indicated that the push-and-pull between Trump and the central bank may be coming to an end. Largely absent were any firm statements on the outlook for interest rates.
Key to watch will be questions and any potential signaling from Senate Banking Committee member Sen. Thom Tillis, who has repeatedly said he will refuse to confirm any Fed char nominee until the Justice Department drops its criminal investigation into current chair Jerome Powell.
In the Middle East, President Trump said US negotiators are ready to leave for Pakistan to resume talks. The president also signaled that the US doesn’t plan to extend its temporary ceasefire with Iran, which is set to expire late Wednesday. In an interview with CNBC on Tuesday, the president said he’s looking for a deal but that, “I expect to be bombing because I think that’s a better attitude to go in with.”
Tehran has said that it will send negotiators, though it is not yet clear who from the regime will attend after days of reluctance from Iran on going to the table. International oil prices rose while US prices fell amid signals that both sides are sending teams.
US retail sales rose by the most in a year, notching a 1.7% on the month, outperforming the previous month’s revised gain of 0.7% and estimates of a 1.4% increase, according to Commerce Department data released Tuesday. The hotter-than-expected read is a bullish signal that Americans are continuing to spend even as gasoline prices have cut into wallets throughout the country.
On the earnings front, results from United Airlines (UAL) after the bell will be watched for the impact of war-stoked rising fuel costs.
LIVE7 updates
Retail sales jump in March by more than expected amid spike in gas prices
US retail sales rose by more than expected in March as high gas prices stemming from the war in Iran didn’t detract from spending, and larger tax refunds boosted purchases.
Retail sales jumped 1.7% last month from an upwardly revised 0.7% gain in February, the Census Bureau reported on Tuesday. Wall Street economists were expecting a 1.3% rise in retail sales.
Avis stock’s apparent short squeeze not yet letting up
Avis Budget Group (CAR) appears to be facing a short squeeze.
Shares of the car rental agency were up another 6% on Tuesday following a 23% surge on Monday. Over the past month, the stock is up 500%.
The short interest in Avis as a percentage of shares outstanding currently stands at 25%, according to S&P Global Market Intelligence. That figure represents the portion of shares that are currently sold short and not yet covered: a ratio above 10% is considered high, while one above 20% is considered extreme, with a high risk of a short squeeze.
According to Deutsche Bank research analyst Chris Woronka, the squeeze was triggered at the beginning of the month by filings that showed two investors, SRS and Pentwater, controlled 71% of shares. When synthetic ownership is factored in, the two investors effectively controlled 108% of Avis shares.
“Recall that CAR’s stock itself is actually no stranger to sharp rallies,” Woronka wrote on April 6. “On November 2, 2021 its shares more than doubled, from $163 to $357 (the intra-day high was $545) on the heels of a strong earnings report and, more importantly (in our view), a disclosure that the company had repurchased 16% of its shares during the fiscal 3Q of 2021.”
Why Goldman Sachs thinks stocks will rip even higher
Wall Street fears ‘too much optimism’ about Iran war as stocks hit record highs
Stocks are trading at record highs. But this new high-water mark for the benchmark S&P 500 (^GSPC) has not been met with resounding enthusiasm or relief.
Read more here in today’s takeaway from the Morning Brief.
Amazon to invest up to $25 billion in Anthropic as part of $100 billion cloud deal
Amazon (AMZN) said it will invest an additional $5 billion in Anthropic (ANTH.PVT) and could inject another $20 billion over time, in a cloud deal that strengthens ties in an increasingly competitive AI race.
Shares of Amazon rose 2.7% before the bell after the news.
