Investor Optimism Improves Following US Inflation Data

The CNN Money Fear and Greed index showed an improvement in market sentiment, with the index moving to the "Neutral" zone on Tuesday.

U.S. stocks closed higher on Tuesday, with the S&P 500 recording its biggest daily percentage surge since April 27 following the release of inflation data.

The annual inflation rate in the U.S. eased to 3.2% in October versus 3.7% in both September and August, compared to market estimates of 3.3%.

Home Depot Inc HD reported better-than-expected third-quarter results. Shares of The Beauty Health Company SKIN shares dipped over 64% on Tuesday after the company reported weaker-than-expected financial results for its third quarter and revised its net sales outlook.

All sectors on the S&P 500 closed on a positive note, with utilities, real estate, and consumer discretionary stocks recording the biggest gains on Tuesday.

The Dow Jones closed higher by around 490 points to 34,827.70 on Tuesday. The S&P 500 rose 1.91% at 4,495.70, while the Nasdaq Composite climbed 2.37% at 14,094.38 during Tuesday’s session.

Investors are awaiting earnings results from Cisco Systems, Inc. CSCO, The TJX Companies, Inc. TJX and Target Corporation TGT today.

At a current reading of 47.1, the index moved to the "Neutral" zone on Tuesday versus a prior reading of 42.3.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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