US stocks, which initially moved higher in early trading on Tuesday, wobbled later in the session as investors continued to debate the possibility of interest rate cuts ahead of a fresh batch of quarterly results.
By midday trading, the S&P 500 (^GSPC) traded flat, while the tech-heavy Nasdaq Composite (^IXIC) dipped roughly 0.4%. The Dow Jones Industrial Average (^DJI), which initially opened flat, climbed about 0.2%.
A rally in stocks hit the buffers on Monday as the market took on Fed Chair Jerome Powell’s repeated warnings that the Federal Reserve will move cautiously on policy, disappointing those betting on early rate cuts.
With earnings season about halfway done, eyes are on whether Tuesday’s corporate results can help jump-start a return to gains for stocks.
In the early going, Spotify (SPOT) shares jumped after the music streamer’s strong guidance, while Eli Lilly’s (LLY) stock popped after the company’s 2024 profit forecast topped estimates. Ford (F) is expected to report after the market close.
Meanwhile, investors will also be digesting comments from Cleveland Fed president Loretta Mester, who said in a speech on Tuesday that “it would be a mistake to move rates down too soon or too quickly without sufficient evidence that inflation was on a sustainable and timely path back to 2%.”
Still, if the economy improves as expected, she believes the Fed “will gain that confidence later this year, and then we can begin moving rates down.”
Fed officials Patrick Harker, Susan Collins, and Neel Kashkari are also scheduled to speak later today.