Stocks continue to climb today, extending Wall Street‘s impressive surge to its highest levels in over 15 months. The S&P 500 opened the day with a 0.4% gain, reaching its highest closing level since April 2022. As of 9:55 a.m. Eastern time, the Dow Jones Industrial Average rose by 187 points, or 0.5%, to 33,139, while the Nasdaq composite experienced a 0.2% increase.
Elevance Health played a significant role in leading the market, witnessing a 7.5% jump. The insurance provider reported stronger-than-expected profits and revenue for the spring season and raised its earnings forecast for the entire year.
Stocks received a general boost from the easing pressure in the bond market, where yields declined following a report indicating that U.K. inflation cooled more than anticipated, reaching a 15-month low of 7.9% in June.
This data from the U.K. aligns with encouraging reports from the U.S., providing hope that inflation is moderating enough to prompt the Federal Reserve to consider pausing its interest rate hikes. Such a move could potentially steer the economy away from the long-anticipated recession.
The strain caused by high-interest rates has already contributed to the collapse of several U.S. banks, which experienced a sudden exodus of customers. As a result, smaller and mid-sized banks have faced intense scrutiny from investors, and they are beginning to release their spring results.
After initially experiencing a loss, Western Alliance Bancorp rebounded and gained 2.8% despite reporting weaker-than-expected profits for the latest quarter. The bank also noted that customers added $3.5 billion in deposits between April and June.
U.S. Bancorp rose by 0.7% after reporting lower-than-expected profits but slightly stronger revenue. Goldman Sachs, which fell short of profit expectations for the quarter, managed to surpass revenue forecasts and added 0.3%.
Carvana, one of the standout performers on Wall Street, surged by 35.1%. The used-car dealer reached an agreement with its lenders to reduce its debt by $1.2 billion. Additionally, Carvana reported a smaller net loss for the quarter, surpassing analysts expectations.
As the second week of the earnings reporting season gains momentum, expectations remain generally low. Analysts predict a third consecutive quarter of declining earnings per share for S&P 500 companies. However, the low bar also increases the likelihood of companies exceeding expectations.
Despite reporting lower-than-expected earnings per share for the latest quarter, trucking company J.B. Hunt Transport Services saw its stock rise by 2.6%. Analysts pointed to encouraging trends highlighted by the company, suggesting that a potential return to growth is on the horizon.
In international markets, London’s FTSE 100 surged by 2% following the positive inflation data. Stocks in Europe and Asia experienced mixed results, with Hong Kong’s Hang Seng falling by 0.3% due, in part, to the selling of property shares after troubled developer China Evergrande disclosed a rise in its total debts to approximately $340 billion over the past two years.
In the bond market, the yield on the 10-year Treasury decreased from 3.79% to 3.74% late Tuesday. This decline has implications for setting rates on mortgages and other significant loans.
Featured Image: Unsplash @ Chenyu Guan
