Investors hit pause on Tuesday as they awaited the Federal Reserve’s rate decision, with Amazon’s earnings on deck to test the prospects for a further Big Tech-fueled rally. Futures on the S&P 500 and Nasdaq 100 slipped roughly 0.1%, while Dow Jones Industrial Average futures wavered below the flatline.
Stocks are on track to end their worst month of 2024, but investors are hopeful for a rebound after a brutal mid-April stretch. Anticipation over the Fed’s next move is competing with better-than-expected quarterly results, with surprises from Paramount and Tesla playing a role.
Investors are expecting the Fed to hold interest rates at historically high levels at the two-day meeting starting on Tuesday. The prospect of rate cuts has diminished since the beginning of the year, leading to an increase in Treasury yields, which is a concern for stocks. The yield on the 10-year Treasury held near six-month highs around 4.63% early Tuesday.
Amazon’s earnings after the bell will be closely watched, following impressive results from Microsoft and Alphabet. Big Tech results have impressed Wall Street, but concerns about heavy AI spending remain.
Other notable earnings include Coca-Cola and McDonald’s, with AMD and Starbucks reporting after the markets close.
In a surprising turn of events, Burger King outperformed McDonald’s in same-store sales growth in the first quarter. Burger King reported a 3.9% increase compared to McDonald’s 2.5% gain. Restaurant Brands has been aggressive in marketing Burger King, especially with new affordable snack wraps.
McDonald’s highlighted strategic menu price increases in the US for the first quarter, but it’s unclear if this impacted store traffic. Molson Coors also saw success with price hikes, with Coors Light volume increasing by a double-digit percentage.
Coca-Cola’s earnings revealed a 13% growth in “price/mix” in the first quarter, indicating that big food players are still implementing price increases on consumers. Yahoo Finance senior reporter Brooke DiPalma will be speaking with Coca-Cola CEO James Quincey for more insights on the results.
