The stock market rallied for a second consecutive day on Tuesday, helping to offset the rough start to April. The S&P 500 climbed 1.2%, the Dow Jones Industrial Average rose 0.7%, and the Nasdaq composite jumped 1.6%.
One of the factors supporting the market was a weaker-than-expected report on U.S. business activity, which eased concerns about a potential recession while also not stoking fears of high inflation. The report from S&P Global helped push Treasury yields lower, further boosting stocks.
A flood of earnings reports also influenced trading, with several companies exceeding analysts’ expectations. GE Aerospace, Kimberly-Clark, General Motors, and Danaher all saw their stocks rise after reporting strong earnings and raising their profit forecasts for the year.
However, not all companies fared well. Nucor and MSCI both fell short of expectations, leading to declines in their stock prices. JetBlue Airways also saw a significant drop despite beating expectations for the latest quarter, citing concerns about competition in Latin America.
The market’s attention now turns to Tesla, which reported its first-quarter results after trading closed. The electric car maker is the first of the “Magnificent Seven” stocks to report earnings, with high expectations to match last year’s gains.
Overall, the market remains in a delicate balance, with concerns about high valuations and inflation pressures. The Federal Reserve’s recent comments about potentially keeping interest rates high to combat inflation have added to the uncertainty.
Investors will be closely watching earnings reports in the coming weeks, particularly from the “Mag 7” stocks, to gauge the market’s direction. The hope is for strong profits to justify current stock prices and ease concerns about overvaluation.
