US Stock Market: DJIA, S&P500 and Nasdaq turns red in early trade on Tuesday
- Nasdaq composite fell 41.98 points or 0.37% to 11,330.62
- Retailer and consumer products companies also gained ground
- Delta Airlines will release its latest earnings report on Wednesday
Stocks traded between gains and losses on Wall Street Tuesday as traders look for a big week of news on inflation and company earnings reports.
The S&P 500 fell 6.46 points or 0.17% to 3,847.97 as of 10:19 a.m. Eastern time. The Dow Jones Industrial Average rose 57.98 points or 0.19% to 31,231.82. The Nasdaq composite fell 41.98 points or 0.37% to 11,330.62.
Oil prices fell sharply by 6% and weighed on energy stocks, which also checked gains elsewhere in the market. Hess plunged 5.6%.
Retailer and consumer products companies also gained ground. Target added 1.2% and Kellogg gained 1.3%.
Big companies have started reporting their latest quarterly results. Beverage and snack maker PepsiCo rose 0.3% after reporting higher-than-expected quarterly profits.
Several big tech stocks fell and checked gains elsewhere in the market. Pricey values for technology equities tend to push the broader market higher or lower. Microsoft fell 2.7%.
Apparel retailer Gap slipped 5.6% after announcing that CEO Sonia Syngal is stepping down from her position after two years on the job.
Investors are watching for quarterly earnings reports from big companies this week as they try to determine just how much damage inflation is causing to consumers and businesses. Expectations for second-quarter results appear subdued. Analysts are anticipating 5.1% growth for companies across the S&P 500, which would be the weakest since the end of 2020, according to FactSet.
Delta Airlines will release its latest earnings report on Wednesday and provide more insight into the travel industry’s recovery from the pandemic. Major banks including JPMorgan Chase and Citigroup are scheduled later this week.
Wall Street’s key concerns remained centered around inflation and whether aggressive rate hikes from the Federal Reserve will push the economy into a recession. Inflation rose as the economy recovered from the pandemic and demand for goods outpaced supplies. But, inflation heated up in February after Russia invaded Ukraine and sparked a jump in energy prices. Supply chain problems have worsened as China lock down cities in an effort to contain new COVID-19 cases.
The Federal Reserve is hiking interest rates in an effort to slow economic growth to help temper the impact of rising inflation. Though the economy is already slowing down as consumers ease up to spending and Wall Street is worried that interest rate hikes could go too far and bring on a recession.
A warning signal continued to flash about a possible recession. The yield on the 10-year Treasury slipped to 2.92% from 2.98% late Monday. It remains below the two-year Treasury yield, which dipped to 3.01%. This is an unusual event and some investors see it as a sign that a recession may hit in the next year or two.
Wall Street is closely watching for any indicator that could hint at easing inflation.
On Wednesday, the Labor Department will release its June report on consumer prices followed by a Thursday release of its June report on prices directly impacting businesses.