U.S. stock futures rose on Tuesday amid another laden list of corporate earnings, including from Bank of America and Goldman Sachs.
Before the market open, futures linked to the S&P 500 (^GSPC) gained 0.44%, while the Dow Jones Industrial Average (^DJI) gained 0.18%. Futures linked to the technology-heavy Nasdaq Composite (^IXIC) climbed 0.79%.
Government bonds were down. The yield on the 10-year note slipped to 3.572%, while the yield on the 2-year note fell to 4.16% on Tuesday morning.
With earnings season in full swing this week, the headliners on Tuesday morning were the big banks. Bank of America (BAC) reported better-than-expected first-quarter results thanks to higher borrowing costs and rates. The stock rose more than 2% in premarket trading.
Meanwhile, Goldman Sachs (GS) reported a failure in its quarterly earnings estimates, hurt by a slowdown in closing deals and offloading some of its Marcus personal loan portfolio. The stock fell almost 4% following the results.
Bank of New York Mellon (BK) beat first-quarter profit estimates on Tuesday, benefiting from rate hikes as it increased the lender’s interest income, which is the difference between what the bank earns on its loans and pays on its deposits.
Shares closed higher on Monday, reversing earlier declines during the trading session as earnings season kicked off. The S&P 500 closed up 0.3%.
The biggest gainer was M&T Bank Corporation (MTB), up 7.8% after beating first-quarter revenue and profit expectations. The situation was different for State Street Corporation (STT), which fell more than 9% after reporting a 3% decline in net interest income in the first quarter.
More revenue is on the way this week. First Horizon (FHN), Western Alliance (WAL), United Airlines (UAL) and Netflix (NFLX) are expected after the market closes on Tuesday.
On the economic front, a mixed bag of housing data was released Tuesday morning. Single-family home starts fell 0.8% to 1,420,000 annualized, lower than the previous month’s reading of 1.45 million homes. Building permits, a forward-looking indicator of real estate activity, fell 8.8% to an annualized rate of 1.413 million, down from last month’s figure of 1.55 million units.
Separately, Richmond Federal Reserve Chairman Tom Barkin, a nonvoting member of the Federal Open Market Committee, which sets interest rates, said Monday he wanted to “see more evidence that inflation comes back to our goal” and that “the labor market has gone from hot to just hot.
Several Fed officials are expected to speak this week, and market participants are waiting to see if they’ll sound a similar tune ahead of the Fed’s blackout period, which begins Saturday.
Investors are growing skeptical of the upcoming Fed rate cut, Treasuries sold off on Monday, with the 2-year yield climbing to 4.189%, marking its highest closing level in more than a year. month. Yields on 10-year notes actually rose when Speaker of the House Kevin McCarthy gave a speech on the debt ceiling at the New York Stock Exchange.
“This growing optimism around the near-term performance of the economy means that investors are now almost fully pricing in another Fed rate hike at their May 3 meeting,” wrote Jim Reid and his Deutsche colleagues. Bank in a note to customers.
Indeed, data from the CME Group shows that markets have priced an 86% chance that the Federal Reserve will raise interest rates another 0.25% in May.
here are some more trending tickers on Yahoo Finance:
Johnson & Johnson (JNJ): The pharmaceutical giant reported better-than-expected first-quarter revenue and profit.
Lockheed Martin Company (LMT): The defense giant released first-quarter results topping Wall Street estimates and reaffirmed its full-year outlook, forecasting net sales of around $65 billion to $66 billion and profit between $26.60. per share and $26.90 per share.
NVIDIA Corporation (NVDA): Shares rose on Tuesday morning after a price target and analyst ratings upgrade from HSBC, citing the chipmaker’s opportunities in AI.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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