US stock indexes were mixed at Tuesday’s opening as investors prepared for a decision on Federal Reserve policy and a group of profits.
The S&P 500 rose by less than 0.1%. The stock reference index rose 0.6% on Monday, its third earnings in four trading days. The technology-focused Nasdaq Composite fell 0.3 percent, while the Dow Jones Industrial Average rose 0.2 percent.
Before the bell, Pfizer fell 1.2% after forecasting lower revenues than analysts had predicted. Investment company KKR fell 1.8% after turning a loss. Estee Lauder lost 9.3% in the preliminary market after the company lowered its revenue and profit forecasts.
Elliott Investment Management revealed a 6% stake in Western Digital, raising its storage stake by 10%. Rockwell Automation ROK -14.08% said quarterly earnings fell as shares fell 8.4%.
Yields on 10-year treasury bonds exceeded 3% for the second day in a row before falling back to 2.957%, compared to 2.995% on Monday. Yields, which are moving backwards on bond prices and are a benchmark for borrowing costs across the economy, reached their highest levels since 2018 in anticipation of higher interest rates.
They have also increased the cost of government loans worldwide. The yield on 10-year German government bonds, the benchmark in Europe, exceeded 1% on Tuesday for the first time since 2015, before falling back to 0.935%.
Overseas stock markets fluctuated. Stoxx Europe 600 rose about 0.3%, driven by shares of banks and oil and gas companies on a busy day for profits in the region.
Shares of BP rose 3.1% after the oil producer reported a major profit of $ 6.2 billion when it abolished the pre-tax levy associated with its decision to leave its assets in Russia. BNP Paribas reported a jump in profits, raising shares of the French lender by 4.3%.
Sweden’s OMX Stockholm All-Share stabilized, rising 0.1%. On Monday, the market was among the hardest hit by a rapid collapse of European stocks caused by a wrong sale by Citigroup.
Markets in mainland China were closed for public holidays. Hong Kong’s Hang Seng rose 0.1%.
All eyes are on the next steps of the Federal Reserve.
Photo: BRENDAN MCDERMID / REUTERS
All eyes are on the Fed’s next steps as the central bank tries to put the brakes on the fastest inflation rate in decades. Rising interest rates are being combined with the coronavirus shutdown in China and the war in Ukraine to raise concerns in stock markets this year.
Interest-bearing officials will meet on Tuesday for a two-day policy meeting. In its conclusion on Wednesday, the Fed is expected to raise interest rates by half a percentage point, the first such increase in 22 years and a subsequent increase of a quarter in March.
Investors will also seek details from President Jerome Powell on the central bank’s plans to cut its bonds. Officials recently said they would allow $ 95 billion worth of securities to mature each month, removing another form of stimulus provided to markets during the pandemic.
“The war in Ukraine doesn’t seem to have derailed the Fed in the slightest,” said Gregory Perden, chief investment officer at Arbuthnot Latham. Financial conditions have already tightened significantly, Mr Perdon added, pointing to the strengthening dollar, rising government bond yields and rising mortgage rates.
The profit season continues at a rapid pace. Airbnb, ABNB -2.17% Starbucks, Lyft and American International Group are on the block after closing markets.
Overall, positive corporate reports have failed to stabilize the market in recent weeks. Profit growth is in line with historical norms of about 11% per year, according to Deutsche Bank analysts, while margins remain close to record levels, despite rising commodity prices.
Commodity futures for Brent oil futures fell 1 percent to $ 106.55 a barrel. Traders are expecting a meeting of ministers from OPEC members and their allies, including Russia on Thursday, and are also watching the shutdowns in China that limit fuel demand.
The European Union’s proposal to ban Russian crude oil by the end of the year is due to be circulated to member states on Tuesday.
Federal Reserve Chairman Jerome Powell said the central bank is likely to raise interest rates by half a percentage point at its meeting. Photo: Samuel Corum / Getty Images
Write to Joe Wallace at joe.wallace@wsj.com
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