By Johann M Cherian and Ankika Biswas
(Reuters) – Wall Street’s main indexes inched higher on Tuesday as investors parsed big-ticket earnings and awaited commentary from policymakers for clues on the timing of the Federal Reserve’s first interest-rate cut.
Eli Lilly jumped 3.5% after forecasting 2024 profit above estimates, driven by demand for its blockbuster weight-loss drug Zepbound and diabetes medicine Mounjaro.
GE HealthCare Technologies gained 8.0% after the medtech firm posted better-than-expected fourth-quarter earnings.
The S&P 500 healthcare sector was up 0.6%, scaling a record high. The materials index gained 1.4%, as chemicals firm DuPont de Nemours jumped 6% after beating fourth-quarter profit estimates, announcing a new $1 billion share-repurchase program and hiking its dividend.
With around half of the S&P 500 companies having reported earnings, 80.4% have surpassed expectations, according to LSEG data last week. Overall S&P 500 earnings are now expected to have risen 7.8% in the fourth quarter from the year-ago quarter.
Investors are actively monitoring forecasts from businesses against a backdrop of high borrowing costs and persistent slowdown concerns.
“Companies are telling us they see growth in six months to a year out and it could be growth in earnings or in the top line. But it’s definitely growth, and it’s not the recession that people were looking for last year,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
“Certainly there have been winners and losers in certain categories, but overall, we’re getting an economy that’s growing.”
Wall Street started the week on a glum note in the previous session on the heels of a blistering rally in the S&P 500, which notched 13 weekly gains out of 14. The benchmark index was aided by largely positive corporate earnings and optimism that a rate cut might be imminent.
However, Fed officials, including Chair Jerome Powell, have actively talked down market expectations of a quick start to policy easing, a key theme in the central bank’s interest-rate decision last week. Strong labor market and economic activity data have also fed into rate-cut anxieties.
Remarks from the Fed’s policymakers through the day, including voting member Cleveland’s Loretta Mester, will be on investors’ watch list.
Traders are betting with a nearly 65% chance that at least a 25-basis-point rate cut could be delivered in May, with the odds standing at around 94% for the first cut in June, according to the CME FedWatch Tool.
At 9:53 a.m. ET, the Dow Jones Industrial Average was up 130.09 points, or 0.34%, at 38,510.21, the S&P 500 was up 9.50 points, or 0.19%, at 4,952.31, and the Nasdaq Composite was up 16.48 points, or 0.11%, at 15,614.16.
Palantir Technologies jumped 26.3% after the data analytics firm forecast annual profit above estimates, while FMC Corp tumbled 8.1% after forecasting downbeat first-quarter profit.
Gartner lost 2.9% after the research and advisory firm forecast annual results below estimates.
Advancing issues outnumbered decliners by a 3.23-to-1 ratio on the NYSE and by a 2.19-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and eight new lows, while the Nasdaq recorded 42 new highs and 57 new lows.
(Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Pooja Desai)
