US STOCKS-Wall Street rises on inflation data but geopolitical tensions cut gains

The S&P 500 and Nasdaq were higher on Tuesday, but gains were cut after a report that Russian missiles crossed into Poland and killed two people, somewhat undermining hopes that cooling inflation would lead to a pullback in rate hikes by the U.S. Federal Reserve. Two people were killed in an explosion in Przewodow, a village in eastern Poland near the border with Ukraine, firefighters told Reuters.

The S&P 500 and Nasdaq were higher on Tuesday, but gains were cut after a report that Russian missiles crossed into Poland and killed two people, somewhat undermining hopes that cooling inflation would lead to a pullback in rate hikes by the U.S. Federal Reserve.

Two people were killed in an explosion in Przewodow, a village in eastern Poland near the border with Ukraine, firefighters told Reuters. The Associated Press cited a senior U.S. intelligence official as saying the blast was due to Russian missiles crossing into Poland. However, the Pentagon said on Tuesday it could not confirm reports that Russian missiles had crossed into Poland.

Russia has been pounding cities across Ukraine with missiles, in attacks that Kyiv said were the heaviest wave of missile strikes in nearly nine months of war, while Poland's prime minister called an urgent meeting of a government committee for national security and defense affairs. "The decline was triggered by reports of a Russian missile landing in Poland," said Steve Sosnick, chief strategist at Interactive Brokers. "This could develop into something far worse, but right now markets are nervous, not panicked."

Stocks pulled back around mid-day, after jumping higher earlier in the session after data showed U.S. producer prices increased less than expected. "You still are seeing volatile trading across markets," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management.

"We are not out of the woods yet as it relates to the Russia-Ukraine war. We did get incrementally better data on inflation but there are also still growth concerns." The Dow Jones Industrial Average rose 9.73 points, or 0.03%, to 33,546.43, the S&P 500 gained 29.4 points, or 0.74%, to 3,986.65 and the Nasdaq Composite added 156.76 points, or 1.4%, to 11,352.98.

Tuesday's inflation report showed producer prices rising 8% in the 12 months through October against an estimated 8.3% rise. Tuesday's equity gains built on a rally kicked off late last week by a cooler-than-expected report on consumer prices.

Shares of Walmart Inc jumped 7% after the top U.S. retailer lifted its annual sales and profit forecasts, benefiting from a steady demand for groceries despite higher prices. Shares of other retailers, including Target Corp and Costco, also rose following Walmart's report.