All three benchmark indexes in the U.S. stock market closed higher on Tuesday as the market anticipated the Federal Reserve's policy next week.
The Dow Jones concluded the trading session at 33,573.28, adding 10.42 points or 0.03 percent. The S&P 500 finished at 4,283.85, gaining 10.06 points or 0.24 percent. Meanwhile, the tech-heavy index Nasdaq Composite increased by 46.99 points or 0.36 percent to close at 13,276.42.
The financial sector led gains among major S&P 500 sectors, adding 1.33 percent. The KBW regional bank index, which keeps tabs on the performance of U.S. regional lenders and thrifts, also saw a 5.41 percent increase. Zions Bancorporation and Comerica Incorporated posted 4.87 percent and 7.14 percent gains, respectively, becoming the best-performing stocks in the regional bank index.
Semiconductor company stocks also broadly gained in the trading session. Advanced Micro Devices climbed by 5.34 percent to $124.23, while Intel Corporation rose by 3.68 percent to close at $30.96.
The Russell 2000 index, which tracks the performance of small U.S. companies, gained 2.69 percent as well.
Cresset Capital chief investment officer Jack Ablin said investors in the equity market gained "a little optimism." Ablin explained that the equity market previously focused on the "top seven names or so," leading to uneven stock performance across the market. According to him, the market's "narrowness" had begun to dissipate.
Meanwhile, shares of Coinbase Global slid 12.09 percent after the U.S. Securities and Exchange Commission filed a lawsuit, accusing the crypto exchange of operating its business in the U.S. illegally without registering with the financial authority.
Apple extended its losing streak by falling 0.21 percent at the closing. The iPhone producer earlier introduced an augmented-reality headset, Vision Pro. According to analysts, investors consider Apple's entrance to the virtual reality market dominated by Meta as "risky."
The market is currently awaiting the Federal Open Market Committee Meeting on June 13-14, where most investors expected the U.S. central bank to keep the country's interest rate steady in the range of 5.00 to 5.25 percent. Analysts said the anticipation of a rate hike pause helped advance "economically sensitive" stocks in the equity market on Tuesday.
Because Fed officials have asserted that they will monitor incoming economic data to determine the next policy move, investors are also waiting for May's consumer price index, which is due to be published next week.
Updates on yields, oil
Treasury yields generally rose on Tuesday. The two-year yield, which usually moves in accordance with interest rate expectations, gained 3.3 basis points to 4.516 percent. Meanwhile, the 10-year Treasury yield remained flat at 3.693 percent. The yield curve between the two- and 10-year notes stayed inverted, indicating expectations of a future recession.
Investors are also anticipating the issuance of around $1 trillion in short-term bills by the Treasury Department following the conclusion of the U.S. debt ceiling crisis. The Treasury will sell $60 billion in four-week bills, $46 billion of 17-week bills and $50 billion in eight-week bills this week. It also plans to issue $123 billion worth of three- and six-month bills next Monday.
Analysts say the Treasury needs to replenish its cash reserves and meet the country's financial obligations. Experts have warned that the large-scale issuance of government bills will pull out significant liquidity from the market. Wells Fargo Securities head of macro strategy Mike Schumacher said the impact of the liquidity drains on stocks and other risk assets "remains to be seen."
Oil prices, meanwhile, declined further, with analysts saying the optimism over Saudi Arabia's plans to cut its daily output begins to fade. WTI crude futures fell to almost $71.59 per barrel, while Brent futures dropped to $74.81.