Traders work at the post where UnitedHealth Group is traded on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
The S&P 500 was little changed on Tuesday, as the market weighed the latest batch of corporate earnings against concerns tied to yields and the geopolitical climate.
The broad index and Nasdaq Composite were both trading around flat. The Dow Jones Industrial Average rose 138 points, or 0.4%, lifted by UnitedHealth shares.
UnitedHealth rallied more than 5% on the back of better-than-expected revenue for the first quarter. That outweighed fellow Dow member Johnson & Johnson, which fell nearly 2% on the heels of mixed quarterly results.
Morgan Stanley advanced more than 3% after beating analysts’ consensus forecasts on both lines. Bank of America tumbled more than 4% after announcing profit and revenue fell.
America’s largest companies have given Wall Street reason for optimism in the early innings of the new corporate earnings season. Of the less than 10% of S&P 500-listed firms that have reported financials, nearly 4 of every 5 have exceeded Wall Street consensus estimates, according to FactSet.
But higher rates weighed on investors. The 10-year U.S. Treasury yield continued trading above the key 4.6% level on Tuesday, marking its highest point going back to November.
Elsewhere, traders followed escalating tensions in the Middle East after Iran’s launch of missiles and drones at Israel on Saturday. The CBOE Volatility Index, commonly referred to as the fear gauge, hovered around 19 after popping in the previous session.
With Tuesday’s bounce on the Dow, the index is on track to snap a sixth-day losing streak, its longest negative streak since June. The blue-chip average has erased most of its 2024 gains, a major reversal considering it approached 40,000 just weeks prior. If the Dow finishes Tuesday in the red, it would be the longest period of continuous daily losses since February 2020.
Traders will monitor remarks from Federal Reserve Chair Jerome Powell, who is set to speak at the Washington Forum on the Canadian Economy in the afternoon. Investors will watch for any insights into the path of monetary policy.
“While we are expecting healthy earnings beats, much of that is already discounted with the rally we’ve seen over the last five months,” said Bryan Reilly, portfolio manager at CIBC Private Wealth. “Market valuations are well in excess of their historical average and already discounting several future benefits including improved earnings growth and central bank rate cuts.”