U.S. stocks rose on Tuesday as Wall Street looked for a strong end to the first month of 2023 amid a hold-up on corporate earnings and the start of the Federal Reserve’s latest policy meeting.
The S&P 500 (^GSPC) was up about 0.8% in midday trading Tuesday, while the Dow Jones Industrial Average (^DJI) was up 0.4%. The technology-heavy Nasdaq Composite ( ^IXIC ) added about 1.1%.
The yield on the benchmark 10-year US Treasury note ticked to 3.501% from 3.546% on Monday. The dollar index ticked up 0.06% to $102.22.
Major US stock averages fell on Monday, kicking off a week full of macro events and key tech earnings. For the session, tech underperformed, as the Nasdaq lost 2% in the index’s worst day since December 2022.
Oil trade steadied after falling sharply as oil ministers review production levels ahead of Wednesday’s OPEC+ meeting. OPEC+’s Joint Ministerial Monitoring Committee is expected to support the group’s current oil production policy.
The biggest item on the macroeconomic calendar is the FOMC’s policy meeting, which begins on Tuesday, ahead of Wednesday’s expected decision to raise rates by a quarter percentage point, bringing the federal funds rate to a target range of 4.5% to 4.75%. However it is unclear what might happen next.
“[We] Powell is expected to be very hawkish at the press conference,” Michael Feroli, chief U.S. economist at JP Morgan, wrote in a note. “We look to him to emphasize two themes: (i) there’s no stopping late, and (ii) don’t expect a rate cut in ’23.”
It’s also an important week for the European Central Bank and the Bank of England, as officials are widely expected to raise benchmark interest rates by 50 basis points on Thursday. The move would mark a slowdown from last year’s aggressive growth, as inflation cools and unemployment levels remain low.
Elsewhere on the economic data front, consumer confidence fell to 107.1 from 109.0 the previous month but remained above the July 2022 level. According to the Conference Board. Economists polled by Bloomberg had forecast a range of 105.0 to 112.5.
Earnings season in full force
The busiest week of the fourth-quarter earnings season began with more than 100 companies representing nearly a third of the S&P 500’s market value reporting results.
Shares of Exxon Mobil ( XOM ) fell nearly 2% on Tuesday after the company reported fourth-quarter earnings that missed expectations, while revenue fell short. The oil giant posted adjusted quarterly earnings of $3.40 per share, compared to analyst forecasts of $3.29. Revenue in the quarter was $95.43 billion, below expectations of $97.3 billion.
Shares of McDonald’s ( MCD ) fell after the company reported fourth-quarter earnings Tuesday morning that beat expectations as more customers visited the fast-food chain amid higher menu prices. Revenue for the quarter came in at $5.93 billion, compared with expectations of $5.75 billion, while the company posted adjusted earnings per share of $2.59, compared with analysts’ forecasts of $2.44.
Shares of General Motors ( GM ) rose on Tuesday. The stock had its best day since October 2022. The carmaker reported a 15% rise in fourth-quarter net income amid weak consumer spending.
United Parcel Service (UPS) posted a decline in fourth-quarter revenue as the company delivered fewer items during the holiday season. Revenue for the quarter fell 2.7% to $27.0 billion, missing analysts’ expectations of $28.09 billion. UPS reported adjusted earnings of $3.62 per share for the quarter ended Dec. 31, beating expectations of $3.59 per share.
Caterpillar Inc. ( CAT ) posted lower-than-expected quarterly profit, the first since the pandemic began. Caterpillar reported adjusted fourth-quarter earnings of $3.86 per share on Tuesday, compared with analysts’ expectations of $3.97.
Spotify ( SPOT ) reported fourth-quarter results that gave investors a mixed outlook ahead, as the company posted a bigger-than-expected loss and gross margin miss. Revenue for the fourth quarter is missed. Meanwhile, total monthly active users beat expectations, coming in at 489 million compared to an expected 478 million.
Finally, shares of Pfizer ( PFE ) fell after the pharma giant reported adjusted earnings of $1.14 per share on sales of $24.29 billion. The company said it expects lower sales in 2023, including a sharp drop in sales of its Covid vaccine.
Elsewhere in the market, shares of Carvana ( CVNA ) rose as much as 33% on Monday and rose again in early trading on Tuesday. Carvana is now part of a list of the 35 most-shorted stocks on the Russell 1,000, according to data from Bespoke Investments. These stocks are up an average of 18.8% this year.
Meanwhile, things would quickly turn technical after the bell. After Microsoft ( MSFT ) signaled a continued slowdown in cloud growth in December, Snap ( SNAP ) is set to provide an early look at what’s cooking in the world of online advertising, user growth and consumer spending.
Meta Platforms (META) is set to report quarterly results on Wednesday, while Amazon (AMZN), Apple (AAPL), Alphabet (GOOG) are gearing up for Thursday.
Abroad, the International Monetary Fund said Monday it expects the global economy to slow. In the United States, economic growth will slow to 1.4% this year as central banks continue to work to control inflation, the IMF said.
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Danny Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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