Stock Market Today: Stocks extend rally on Fed rate pivot; Housing starts surge

Check back for live updates throughout the trading day.

U.S. equity futures edged higher again Tuesday, lifting the S&P 500 further into its longest weekly winning streak since 2017, as investors continue to focus on Federal Reserve rate cuts. 

Updated at 8:36 AM EST

Housing starts surge

Housing starts surprised to the upside last month, Commerce Department data indicated, with the overall total rising 14.8% to an annualized rate of 1.56 million and the strongest reading of the year. 

Permits for new construction, a good indicator of demand, slipped 2.5% to a rate of 1.46 million, just shy of the Street's 1.48 million forecast. 

Stocks were modestly softer following the stronger-than-expected starts data, with the S&P 500 called 8 points higher and the Dow set for a 75 point opening bell gain. The Nasdaq is called 18 points higher.

Updated at 7:59 AM EST

Big Boeing deal

Boeing BA shares are a notable pre-market mover, rising 1% to extend their six-month advance to around 24%, after scoring its first airplane sale to German carrier Lufthansa in nearly three decades.

Related: Boeing scores win over Airbus with first Lufthansa plane sale since 1995

Stock Market Today

Pushback from Fed officials on the likelihood of a spring rate reduction has had little effect on bullish market sentiment, with Treasury yields holding steady at multi-month lows and traders pricing in a 66.7% chance that cuts will begin as early as March. 

San Francisco Fed President Mary Daly, meanwhile, told The Wall Street Journal in a late Monday report that she was mindful of "overtightening" in terms of holding rates at elevated levels. She added that rate cuts in 2024 appear likely given inflation's downward path.  

Set against a broadly resilient economy, which the Atlanta Fed's GDPNow forecasting tool sees growing at a current-quarter clip of around 2.6%, and an improving job market, investors see the Fed's dovish pivot as both supporting earnings growth and powering further stock market performance well into 2024.

"With inflation still somewhat elevated, we cannot completely discount the possibility of renewed upward pressure on interest rates," said Jeffrey Buchbinder and Adam Turnquist, chief equity and technical strategists at LPL Financial.

"However, if inflation moves down near the Fed’s target over the course of 2024 as we expect, stocks should benefit," the pair added, noting the importance of a stock and bond market correlation.

Benchmark 10-year note yields, which rallied 33 basis points last week, the biggest five-day move since 2010, were holding steady at 3.907% in early New York trading, while 2-year notes were pegged at 4.432%.

The U.S. dollar index was also little changed at 102.551 against a basket of its global peers, but that was more tied to the downside move in the yen. The Japanese currency fell 1.3% against the greenback after the Bank of Japan maintained its ultra-loose monetary policy following its final meeting of the year. 

In other markets, global oil prices held at two-week highs following a move by BP Plc, as well as other shipping consortiums, to suspend cargo travel through the Red Sea and Suez Canal following a series of drone and missile attacks from Iran-backed Houthi rebels in Yemen.

Brent crude futures contracts for February delivery, the global pricing benchmark, were last seen 7 cents higher on the session at $78 a barrel. WTI contracts for January delivery edged 7 cents higher to $72.89 per barrel.

On Wall Street, stock futures suggest another modestly firmer start to the trading day, with contracts tied to the S&P 500 priced for a 6 point opening bell gain.

Contracts tied to the Dow Jones Industrial Average, which last night closed at an all-time high of 37,306.02 points, are calling the market 57 points higher while those linked to the Nasdaq are priced for a 26 point gain. 

In Europe, the regionwide Stoxx 600 was marked 0.29% higher in early Frankfurt trading, with sentiment supported by the dovish Bank of Japan rate decision. 

The Nikkei 225, meanwhile, surged 1.41% after the BoJ held rates steady at -0.1%. It also made no changes to its yield-curve control policy, which aims to keep 10-year government bond yields from rising past 1%. 

The broader MSCI Asia ex-Japan index slipped 0.05% into the close of trading. 

• Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.