In early trading, the S&P 500 showed minimal change, while the Dow Jones Industrial Average dipped 0.2%, retreating from its recent milestone of surpassing 38,000. Simultaneously, the Nasdaq composite experienced a 0.1% decline as of 9:35 a.m. Eastern time.
Procter & Gamble saw a notable 5.6% increase after reporting robust profits for the latest quarter, surpassing analysts’ expectations. The company, known for brands like Charmin and Olay, attributed its success to price increases for its products and raised its profit forecast for the full fiscal year.
United Airlines soared 9.3% following its report of stronger-than-expected profits in the last quarter of 2023. The airline benefited from increased revenue in both basic economy and premium seats. However, it cautioned about potential losses in the first quarter of this year due to the grounding of its Boeing 737 Max 9 planes.
These positive performances helped counterbalance an 8.8% decline for 3M. Despite reporting stronger-than-expected profits for the end of 2023, the maker of Post-it notes and Command strips provided a lower-than-expected earnings forecast for the upcoming year.
As earnings season gains momentum, over a dozen companies in the S&P 500 disclosed their quarterly results on Tuesday morning. More than 50 are scheduled to report later in the week, including notable names like Tesla and Intel.
Among Tuesday’s highlights, Johnson & Johnson saw a 2.4% decline after reporting weaker-than-expected profits, while Verizon Communications rose 4.3% for surpassing analysts’ profit estimates. General Electric, although exceeding expectations, experienced a 2.5% drop in its stock value after offering a profit forecast for the current quarter that fell short of analysts’ predictions.
Expectations for end-of-2023 company profits are relatively subdued, with analysts forecasting weaker overall earnings per share compared to the previous year. This would mark the fourth decline in the last five quarters, according to FactSet.
Despite these expectations, the stock market has reached record highs, with the S&P 500 returning to an all-time peak last week for the first time in two years. Much of this surge is attributed to anticipation of multiple interest rate cuts by the Federal Reserve throughout the year.
While such rate cuts can boost investment prices and ease economic pressure, critics caution that market predictions may be overly optimistic. Treasury yields, reflecting expectations of future rate cuts, displayed mixed trends on Tuesday, with the 10-year Treasury yield rising slightly to 4.13%.
In global markets, Hong Kong’s Hang Seng rebounded by 2.6%, recovering from earlier losses in the year. This was driven by hopes that Chinese authorities would take steps to stabilize their markets. Meanwhile, in Japan, despite the Bank of Japan maintaining ultra-easy interest-rate policies, the Nikkei 225 dipped 0.1%, with analysts interpreting bank officials’ comments as potential hints of rate hikes later in the year.
Featured Image: Freepik @ wirestock
