Wall Street returns to the upside, with US indices ending the day at their highest level: while the Dow Jones gave up 0.25% at 38,972, the S&P500 closed in the green (+0.17% at 5,078), the Nasdaq Composite advanced 0.37% to 16,035 (five points off its record high) and the Nasdaq-100 (+0.2%) ended 0.15% off its record closing high of 18,000.000.

As it is customary for traders to end the month at the index highs, this is looking good with 48 hours to go, provided the PCE inflation figure doesn't dampen Wall Street's spirits on Thursday.

The Nasdaq benefited from rises by Palo +4%, Micron +2.7%, Netflix +2.4%, Illumina +2%, Apple +0.8%, Alphabet +1%. The index failed to reach the 18,000 mark due to declines by Amgen -2.8%, Electronic Arts -2%, Adobe -1.5%, Broadcom -1%.

As investors prepare for several key statistics to be released in the coming days, high valuations threaten to condemn the US stock market to a standstill.

At 23 times expected earnings, the S&P 500 index, already up over 6% since January 1, is 35% more expensive than its 20-year average of 17 times, according to Citi.

In this sense, Thursday's release of the PCE index of consumer spending excluding food and energy, the Federal Reserve's preferred indicator for gauging inflation, will act as a test.

On the statistical front, US household sentiment deteriorated sharply in February (from 110.9 to 106.7), according to the Conference Board's monthly survey. For Dana Peterson, the Board's chief economist, this sudden deterioration reflects the persistent uncertainty surrounding the US economy.

Durable goods orders in the US fell by 6.1% in January compared with December, more than expected. Excluding the transportation sector, where orders plunged by 16.2%, however, they fell by just 0.3% last month.

On the bond market, the risk-on pause in the stock markets and the day's mediocre figures do not favor a return to Treasuries, with the yield on the US ten-year rate hovering around 4.300% versus 4.285% on Monday.

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