NEW YORK: Wall Street’s main indexes were mixed in choppy trading on Tuesday as investors scrutinized big-ticket earnings and awaited commentary from policymakers for clues on the timing of the Federal Reserve’s first interest-rate cut.
GE HealthCare Technologies gained 11.7% after the medtech firm posted better-than-expected fourth-quarter earnings, driving the S&P 500 healthcare sector up by 0.4%, to an all-time high.
However, Eli Lilly reversed earlier gains and lost 1.0%, even after forecasting 2024 profit above estimates.
The materials index gained 1.6%, as chemicals firm DuPont de Nemours jumped 6.7% after beating fourth-quarter profit estimates, announcing a new $1 billion share-repurchase program and hiking its dividend.
With over half of the S&P 500 companies now having reported earnings, 81.2% surpassed expectations, according to LSEG data. Overall S&P 500 earnings are expected to have risen 8.1% in the fourth quarter from the year-ago quarter.
Investors are monitoring forecasts from businesses against a backdrop of high borrowing costs and persistent slowdown concerns.
“Investors have been expecting that 2024 will be a positive year for the stock market in general, and if you’re expecting rate cuts, it ought to be,” said Russell Hackmann, founder of Hackmann Wealth Partners.
“But there’s a lot of risk out there, both geopolitical and in terms of what the Fed’s going to do.” Wall Street started the week on a glum note in the previous session on the heels of a blistering rally in the S&P 500, which notched 13 weekly gains out of 14. The benchmark index was aided by largely positive corporate earnings and optimism that a rate cut might be imminent.
However, Fed officials, including Chair Jerome Powell, have actively talked down market expectations of a quick start to policy easing, a key theme in the central bank’s interest-rate decision last week. Strong labor market and economic activity data have also fed into rate-cut anxieties.
Remarks from the Federal Reserve’s policymakers through the day rank high on investors’ watch list.
Traders are betting on a nearly 65% chance that at least a 25-basis-point rate cut could be delivered in May, with the odds standing at around 94% for the first cut in June, according to the CME FedWatch Tool.
At 11:49 a.m. ET, the Dow Jones Industrial Average was up 51.71 points, or 0.13%, at 38,431.83, the S&P 500 was down 2.89 points, or 0.06%, at 4,939.92, and the Nasdaq Composite was down 43.24 points, or 0.28%, at 15,554.44.
Weighing on the tech-heavy Nasdaq, chip stocks Nvidia and Broadcom fell over 2%, sending the Philadelphia SE Semiconductor index down 1.9%.
The KBW Regional Banking index dropped 0.8% as New York Community Bancorp plummeted 15.3%, stretching a selloff since the lender reported a surprise quarterly loss last week.
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