Stocks in the U.S. are facing mixed trading on Tuesday, with concerns about high interest rates battling against strong profit reports from major companies. The S&P 500 remained mostly unchanged, recovering from a sharp loss due to a surge in Treasury yields. The Dow Jones Industrial Average saw a 0.4% increase, while the Nasdaq composite rose by 0.1%.
UnitedHealth saw a 5.3% increase after reporting better-than-expected results for the first quarter, boosting the market. Morgan Stanley also performed well, with a 3% rise after exceeding expectations. Big Tech stocks like Microsoft and Nvidia also saw gains, calming the market.
However, the majority of stocks on Wall Street experienced declines. Northern Trust dropped 4.4% after reporting weaker earnings, while Johnson & Johnson sank 1.2% despite beating profit forecasts.
With interest rates remaining high, companies are under pressure to deliver strong profits and revenue. The Federal Reserve is unlikely to cut its main interest rate anytime soon, as inflation and economic data continue to exceed expectations.
Treasury yields rose following a speech by the vice chair of the Federal Reserve, Philip Jefferson, who expects inflation to ease. Fed Chair Jerome Powell’s upcoming speech could further impact financial markets, as traders adjust their rate cut forecasts for the year.
Stocks sensitive to interest rates, like utility stocks and real estate investment trusts, saw the sharpest losses. Homebuilder stocks also slumped as mortgage rates increased.
In international markets, indexes in Asia and Europe fell as they followed Wall Street’s decline on Monday. Stock indexes dropped 2.1% in Hong Kong, 2.3% in Seoul, and 1.8% in London.
Overall, the market remains volatile as investors navigate the impact of high interest rates and strong corporate earnings.
