Wall Street holds steady/ stock market S&P 500/ U.S. stocks Morgan Stanley earnings/ energy stocks stabilize/ Fed interest rates inflation/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ U.S. stocks steadied Wednesday following upbeat quarterly earnings from Morgan Stanley, United Airlines, and other major companies, which helped offset losses in energy and tech stocks from the prior day. The S&P 500 hovered near record highs, and key companies’ earnings reports drove optimism among investors.
Stock Market Holds Steady Today Quick Look
- Main Drivers: Earnings reports from Morgan Stanley, United Airlines, and J.B. Hunt exceeded expectations.
- Sector Movements: Energy stocks stabilized, tech stocks recovered slightly.
- Global Impact: ASML’s cautious outlook hit Asian chipmakers; UK inflation drop lifted FTSE 100.
- Federal Reserve: Rate cuts remain in focus as inflation moves closer to the Fed’s target.
Stocks Hold Steady as Big Companies Beat Profit Expectations
Deep Look
U.S. stocks held relatively steady Wednesday after earnings reports from major corporations, including Morgan Stanley and United Airlines, offered a dose of optimism to Wall Street. The S&P 500 saw little change in early trading, remaining near all-time highs after sliding on Tuesday. The Dow Jones Industrial Average was up 49 points, or 0.1%, while the Nasdaq composite dropped by a similar margin.
Morgan Stanley rose 5.5% after reporting a stronger-than-expected profit, with CEO Ted Pick noting a “constructive environment” across global business units. The investment bank’s success underscores the high client demand for asset management services as stocks remain near record levels. United Airlines also posted better-than-expected earnings, with shares jumping 5.4% after the company announced a $1.5 billion stock buyback initiative.
Freight company J.B. Hunt Transport Services added to the positive earnings news, rising 4.5% after beating analyst expectations. These solid results helped counter a 1.6% dip in Omnicom, which narrowly surpassed profit forecasts in its latest quarter but still faced a modest decline.
Energy and Technology Stocks Stabilize
Energy stocks, among Tuesday’s biggest losers, showed signs of stability. Brent crude oil edged up 0.1% to $75 per barrel, reclaiming a fraction of the previous day’s 4% drop. Investor concerns around potential disruptions in Iranian oil exports eased, contributing to a more balanced outlook in the sector. This shift helped boost Exxon Mobil by 0.5%.
In technology, U.S. stocks saw slight recovery after Tuesday’s steep drops, spurred by cautionary remarks from ASML, a major chip industry supplier. ASML’s CEO Christophe Fouquet noted strong demand from artificial intelligence but tempered expectations for other tech sectors. Broadcom and Nvidia, both hit hard on Tuesday, managed modest gains of at least 0.5% in Wednesday trading.
The ripple effects of ASML’s outlook reverberated globally, notably impacting Asian chipmakers. Japan’s Nikkei 225 declined 1.8%, driven largely by a 9.2% fall in Tokyo Electron and a 13.4% drop in Lasertec Corp., which specializes in chip inspection technology.
Global Markets Respond to Mixed Signals
European markets had mixed reactions, with the FTSE 100 gaining 0.9% after the U.K. reported its lowest inflation in over three years. This development boosted expectations that the Bank of England may soon lower interest rates, supporting investor optimism.
In the U.S., recent indicators suggest inflation is nearing the Federal Reserve’s 2% target, raising hopes for a “soft landing” where inflation is controlled without triggering a recession. This prospect has led the Fed to shift its focus toward economic growth while cautiously implementing rate cuts.
In the bond market, the 10-year Treasury yield fell to 4.00% from 4.03%, while the two-year yield, which closely reflects Federal Reserve policy expectations, dipped to 3.92%. These shifts align with recent trends, as the Fed continues to monitor inflation while keeping an eye on broader economic stability.
