In a reversal of fortune, the Dow Jones Industrial Average (^DJI) snapped its six-day losing streak on Tuesday, buoyed by Federal Reserve Chair Jerome Powell’s commentary on the enduring nature of interest rates.
Closing the trading session with a 0.2% gain, or over 50 points, the Dow marked a notable uptick as investors absorbed Powell’s indication that the Federal Reserve may require an extended period to achieve confidence in its efforts to combat inflation.
Contrarily, the broader market indices, the S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC), saw marginal declines of 0.2% and 0.1% respectively, amidst fluctuations throughout the trading day.
The market landscape was further shaped by persistently elevated bond yields, compounded by escalating tensions in the Middle East following Iran’s recent attacks on Israel.
Bond yields surged following Powell’s remarks, with the 2-year note briefly surpassing 5%—its loftiest level since November. The benchmark 10-year Treasury yield (^TNX), which had reached its highest point of 2024 on Monday, ascended approximately 3 basis points, settling around 4.66% on Tuesday.
Ahead of the market open, a deluge of corporate earnings reports inundated investor attention. UnitedHealth (UNH) witnessed a 5% surge in its shares after surpassing quarterly profit expectations, despite disclosing a projected $1.6 billion impact from a cyberattack in February.
Additionally, investors parsed through significant bank earnings releases: Bank of America (BAC) disclosed an 18% year-over-year decline in first-quarter profit, attributed to weakened revenue sources, while Morgan Stanley (MS) exceeded expectations, prompting a rise in its stock price. Meanwhile, BNY Mellon (BK) outperformed profit projections, while Johnson & Johnson (JNJ) reported a revenue shortfall.
