US Shares Shake as Earnings Data for Firms Begin
Shares were mixed in morning trading on Wall Street on Tuesday. Traders are gearing up for a big week of inflation and corporate earnings news. The S&P 500 fell 0.3%. The Dow rose 0.1% to a total of 31,210. The Nasdaq decreased 0.4%. Oil prices lost 6%, and energy stocks were weighed down, which also weighed on gains elsewhere in the market. Major firms are beginning to release their newest quarterly results. PepsiCo rose 0.3% after the earnings report.
Several major technology companies fell, checking gains elsewhere in the market. Expensive valuations for technology stocks tend to push the broader market higher or lower. Microsoft fell 2.7%. Gap dropped 5.6% after announcing that its CEO is stepping down after two years.
Investors are bracing for more earnings from major companies this week. They are trying to determine the toll that widespread inflation is taking on consumers and businesses. Hopes for second-quarter data have been decreased. Analysts forecast a 5.1% increase for companies across the S&P 500. This will be the weakest since the end of 2020. Delta Airlines data will provide more insight into the travel industry’s recovery from the pandemic.
Shares and Fed
Inflation remains a major concern on Wall Street, also whether aggressive rate hikes by the Federal Reserve will push the economy into recession. Inflation boosted as the economy revived from the pandemic and requests for goods exceeded supply. However, inflation heated up in February after Russia invaded Ukraine, causing energy prices to jump. Supply chain problems worsened. China is locking down cities to contain new COVID-19 cases.
The Fed raises rates to slow economic growth and help cushion the effects of rising inflation. However, the economy is already slowing as consumers cut back on spending, and Wall Street worries that rising interest rates could go too far and trigger a recession. In the bond space, the warning mark of a recession was still ablaze. The 10-year Treasury yield fell to 2.92%. It remains unchanged at the two-year Treasury rate, which fell to 3.01%. That happens rare, and some investors view it as a mark that a recession is possible in the next two years. Wall Street is checking nearly for any signs that may speck to easing inflation.
