US stocks rose on Tuesday as Wall Street appeared to end a strong first month of 2023 amid a sustained spate of corporate earnings and the start of the Federal Reserve’s latest monetary policy meeting.
The S&P 500 (^GSPC) was up nearly 0.8% in midday trade on Tuesday, while the Dow Jones Industrial Average (^DJI) was up 0.4%. The tech-heavy Nasdaq Composite (^IXIC) gained about 1.1%.
The yield on the benchmark 10-year US Treasury bond fell to 3.501% from 3.546% on Monday. The dollar index fell 0.06% to $102.22.
Major US stock averages fell on Monday, kicking off a week of macro events and significant tech earnings. During the session, the technology sector underperformed as the Nasdaq fell 2% on the index’s worst day since December 2022.
Oil stabilized after trading sharply lower ahead of Wednesday’s OPEC+ meeting as oil ministers are set to review production levels. The joint OPEC+ ministerial oversight committee is expected to endorse the group’s current oil production policy.
The biggest spot on the macro calendar is the FOMC monetary policy meeting, which begins on Tuesday ahead of an expected decision on Wednesday to hike interest rates by a quarter of a point, bringing federal funds to a target range of 4.5% to 4.75% . But it’s unclear what might come next.
“[We] Expect Powell to get pretty hawkish at the press conference,” Michael Feroli, chief US economist at JP Morgan, wrote in a note. “We expect him to highlight two themes: (i) slowdown won’t stop, and (ii) don’t expect rate cuts in 23.”
Jerome Powell, Chairman of the Board of Governors of the Federal Reserve, attends a central bank symposium at the Grand Hotel in Stockholm, Sweden January 10, 2023. (Photo by CLAUDIO BRESCIANI/TT News Agency/AFP via Getty Images)
It’s also a key week for the European Central Bank and Bank of England as officials are widely expected to hike interest rates by 50 basis points on Thursday. Such a move would mean a slowdown from last year’s aggressive rate hikes as inflation cools and unemployment remains low.
Elsewhere on the economic data front, consumer confidence fell to 107.1 from 109.0 the previous month but remains above July 2022 levels according to The Conference Board. Economists polled by Bloomberg were forecasting a range of 105.0 to 112.5 .
The story goes on
Reporting season in full force
The busiest week of the fourth-quarter earnings season began with more than 100 companies representing nearly a third of the S&P 500’s market value reporting results.
Exxon Mobil (XOM) shares fell nearly 2% on Tuesday after the company reported fourth-quarter earnings that beat expectations while revenue lagged. The oil giant reported adjusted quarterly earnings per share of $3.40, compared to analysts’ forecast of $3.29. Revenue for the quarter was $95.43 billion, below expectations of $97.3 billion.
McDonald’s (MCD) shares fell after the company on Tuesday morning reported fourth-quarter results that beat expectations as more customers frequented the fast-food chain amid higher menu prices. Revenue for the quarter was $5.93 billion compared to an expected $5.75 billion, while the company reported adjusted earnings per share of $2.59 compared to analysts’ forecast of 2 reported $.44.
General Motors (GM) shares rallied on Tuesday. The stock is having its best day since October 2022. The automaker reported a 15% rise in fourth-quarter net income amid weak consumer spending.
United Parcel Service (UPS) saw sales fall in the fourth quarter as the company shipped fewer items during the holiday season. Revenue for the quarter fell 2.7% to $27.0 billion, falling short of analysts’ expectations of $28.09 billion. UPS reported adjusted earnings per share of $3.62 for the quarter ended December 31, ahead of expectations of $3.59 per share.
Caterpillar Inc. (CAT) posted lower-than-expected quarterly earnings for the first time since the pandemic began. Caterpillar on Tuesday reported adjusted fourth-quarter earnings of $3.86 per share, versus $3.97 that analysts had expected.
Spotify (SPOT) reported fourth-quarter results that gave investors a mixed outlook as the company posted a bigger-than-expected loss and a hit to gross margins. Missed fourth quarter revenue. Meanwhile, the total number of monthly active users exceeded expectations, coming in at 489 million versus the expected 478 million.
Finally, Pfizer (PFE) shares fell after the pharma giant reported adjusted earnings per share of $1.14 on sales of $24.29 billion. The company expects lower sales in 2023, including a sharp drop in sales of its COVID vaccine.
Elsewhere, shares of Carvana (CVNA) were up as much as 33% on Monday, climbing again in early trading on Tuesday. According to data from Bespoke Investments, Carvana is currently among the 35 most heavily trimmed stocks in the Russell 1,000. These stocks are up an average of 18.8% this year.
Meanwhile, after the bell, it will quickly come down to technique. Snap (SNAP) will provide an early glimpse into the world of online advertising, user growth and consumer spending after Microsoft (MSFT) signaled an ongoing slowdown in cloud growth in December.
Meta Platforms (META) is set to release quarterly earnings on Wednesday, while Amazon (AMZN), Apple (AAPL) and Alphabet (GOOG) gear up for Thursday.
Overseas, the International Monetary Fund said Monday it expected the global economy to slow. In the US, economic growth will slow to 1.4% this year as central banks continue to work to tame inflation, the IMF said.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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