Wall Street rose on Tuesday as investors awaited the Federal Reserve’s policy meeting next week, and the cryptocurrency sector fell sharply after US regulators sued two of its heavyweights.
Wall Street’s benchmark S&P 500 added 0.2 percent, nearing technical bull-market territory it briefly entered on Monday after rising more than a fifth from its October 2022 low.
The tech-heavy Nasdaq Composite rose 0.2 percent, paring early morning losses.
The rally overtook the cryptocurrency world as Coinbase shares plunged 13.8 percent after the Securities and Exchange Commission sued the crypto exchange for alleged multiple violations of US securities laws.
The SEC’s move comes shortly after it brought a lawsuit against Binance, the world’s largest crypto exchange, alleging 13 violations of securities laws, including commingling customer money with a separate company owned by its chief executive.
Other crypto-related companies joined the downtrend, with Riot Platforms down 0.9 percent and Hut 8 Mining down 1.8 percent.
Meanwhile, after data from the US Labor Department last Friday showed wage growth moderated last month, investors looked for further signs that the Fed will resist raising rates next week.
US consumer inflation, released ahead of the monetary policy meeting, is forecast to cool slightly in the month to May, while core prices are expected to remain unchanged.
“While labor market rebalancing and inflation progress are encouraging, a solid growth outlook will prompt the Fed to hike again in July,” said Jan Hatzius, chief economist at Goldman Sachs.
In government debt markets, the yield on the 10-year US Treasury note rose 0.01 percentage point to 3.7 percent, while the shorter two-year yield was up 0.03 percentage point to 4.5 percent.
In Europe, the region-wide STOXX 600 and France’s CAC 40 rose 0.4 percent, while Germany’s DAX added 0.2 percent, recovering early losses.
Eurostat, the eurozone’s statistics agency, reported that retail sales fell 2.6 percent in April, following a 3.3 percent decline the previous month, as the group’s higher borrowing costs continued to weigh on household consumption.
Markets expect the European Central Bank to raise its benchmark interest rate from the current 3.25 percent when policymakers meet next Thursday.
The Reserve Bank of Australia raised interest rates to 4.1 percent from 3.85 percent on Tuesday, shrugging off market expectations of a pause and signaling further tightening.
Inflation reached its peak but remained “very high” at 7 percent, policymakers said, as they raised rates for the 12th time in a year in an effort to bring the rate of inflation back to 2 to 3 percent. Target range.
The Australian dollar rose 0.89 percent against the US dollar to trade at $0.67, while the S&P/ASX 200 index fell 1.2 percent.
Markets in Asia were muted as Hong Kong’s Hang Seng index lost 0.1 percent, while the CSI 300 index of Shanghai- and Shenzhen-listed shares fell 0.9 percent.
Japan’s benchmark topics bucked the downward trend, paring early losses to 0.7 percent.
Japanese real wages contracted for a 12th straight month, according to data released on Tuesday, bolstering expectations that the Bank of Japan will maintain its tight monetary stance.