After ending the previous session mostly higher, stocks have seen some further upside over the course of the trading day on Tuesday. Trading activity has remained somewhat subdued, however, with traders keeping a close eye on the Federal Reserve.
The major averages have recently pulled back off their highs for the session but remain firmly positive. The Dow is up 110.20 points or 0.7 percent at 15,290.05, the Nasdaq is up 24.68 points or 0.7 percent at 3,476.81 and the S&P 500 is up 9.88 points or 0.6 percent at 1,648.92.
The strength on Wall Street may be partly in reaction to comments from European Central Bank President Mario Draghi, who said the central bank has not ruled out the possibility of negative deposit rates and other non-standard policy measures.
Speaking at a farewell conference for Bank of Israel Governor Stanley Fischer in Jerusalem, Draghi said, "We will look with an open mind at these measures that are especially effective in our institutional setup and that fall within our mandate."
Draghi reiterated the warning that some of the non-standard measures could lead to unintended consequences but said this does not mean that they should not be used.
Traders have also reacted positively to a report from the Commerce Department showing a notable rebound by housing starts in the month of May.
The report said housing starts climbed 6.8 percent to a seasonally adjusted annual rate of 914,000 in May from the revised April estimate of 856,000.
However, economists had been expecting housing starts to surge up to an annual rate of 955,000 compared to the 853,000 originally reported for April.
With starts coming in well below estimates despite the increase, the report may be seen as the type of lukewarm data that is positive for the economy but won't lead the Fed to scale back its stimulus program in the near future.
Chris Low, chief economist at FTN Financial, said, "Given the importance of housing to the Fed, disappointing starts are another reason for the FOMC to keep easing aggressively, though as long as housing is improving the Fed will be happy."
A separate report from the Labor Department showed a modest increase in consumer prices in the month of May, with the slight increase largely reflecting higher shelter costs.
Sector News
Semiconductor stocks have shown a strong move to the upside over the course of the session, driving the Philadelphia Semiconductor Index up by 1.2 percent. With the gain, the index has reached its best intraday level in over five years.
Spreadtrum Communications (SPRD) and Power Integrations (POWI) are turning in two of the semiconductor sector's best performances.
Considerable strength has also emerged among defense stocks, as reflected by the 1.1 percent gain being posted by the Philadelphia Defense Sector Index. The gain has lifted the index to a record high.
Flir Systems (FLIR) has helped to lead the defense sector higher, surging up by 5.5 percent following an upgrade by Raymond James to Strong Buy from Market Perform.
Electronic storage, natural gas, and brokerage stocks are also posting notable gains, while gold stocks are bucking the uptrend amid a sharp drop by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index edged down by 0.2 percent, while China's Shanghai Composite Index inched up by 0.1 percent.
The major European markets also ended the day mixed. While the French CAC 40 Index dipped by 0.1 percent, the German DAX Index rose by 0.2 percent and the U.K.'s FTSE 100 Index advanced by 0.7 percent.
In the bond market, treasuries have come under pressure, extending the downward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.5 basis points at 2.196 percent.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.