U.S. stocks rose on Tuesday, capping a strong January amid continued strong growth in corporate earnings and the start of the Federal Reserve’s latest policy meeting.
The S&P 500 ( ^GSPC ) rose 1.5% as it gained more than 5% for the month. The Dow Jones Industrial Average (^DJI) rose 1.1%. The tech-rich Nasdaq Composite ( ^IXIC ) added roughly 1.7% to end the month up 11%. It marked the Nasdaq’s best month since July and its best January since 2001.
The yield on the 10-year US Treasury fell to 3.511% from 3.546% on Monday. The dollar index decreased by 0.21% and made 102.06 dollars.
Major U.S. stock averages bounced back from losses on Monday, kicking off a week full of macro events and big tech earnings.
The biggest item on the macroeconomic calendar is the FOMC’s policy meeting, which begins on Tuesday, ahead of an expected decision on Wednesday to raise interest rates by a quarter percentage point to the federal funds target range of 4.5% to 4.75%. However, it is not clear what might happen next.
“[We] Expect Powell to be quite hawkish at the press conference,” Michael Ferroli, chief US economist at JP Morgan, wrote in a note. “We’re looking for him to emphasize two themes: (i) the slowdown isn’t stopping, and (ii) don’t expect a rate cut on the 23rd.”
It’s also a big week for the European Central Bank and the Bank of England, as officials are expected to raise benchmark interest rates by 50 basis points on Thursday. Such a move would mean a slowdown in last year’s aggressive growth rate as inflation cools and the unemployment rate remains low.
Elsewhere in economic data, consumer confidence fell to 107.1 from 109.0 the previous month, but remained above July 2022 levels, according to The Conference Board. Economists polled by Bloomberg had forecast a range of 105.0 to 112.5.
Earnings season in full force!
The busiest week of the fourth-quarter earnings season kicked off, with more than 100 companies accounting for nearly a third of the S&P 500’s market value report.
Shares of Exxon Mobil ( XOM ) rose more than 2% on Tuesday after the company reported profit that beat expectations in the fourth quarter, while revenue came up short. The oil giant posted quarterly adjusted earnings per share of $3.40, compared to analysts’ estimates of $3.29. Revenue for the quarter was $95.43 billion, missing expectations for $97.3 billion.
Shares of McDonald’s ( MCD ) fell after the company reported fourth-quarter earnings that beat expectations Tuesday morning as more customers flocked to the fast-food chain amid higher menu prices. Revenue for the quarter was $5.93 billion, compared to expectations of $5.75 billion, while the company posted adjusted earnings per share of $2.59, compared to analysts’ estimates of $2.44.
Shares of General Motors ( GM ) rose Tuesday, gaining more than 8%. The automaker reported a 15% rise in fourth-quarter net income amid weak consumer spending.
United Parcel Service (UPS) reported a drop in revenue in the fourth quarter as the company shipped fewer items during the holiday season. Revenues for the quarter fell 2.7% to $27.0 billion, missing analysts’ expectations of $28.09 billion. UPS reported adjusted earnings of $3.62 per share for the quarter ended Dec. 31, beating expectations of $3.59 per share.
Caterpillar Inc. ( CAT ) reported lower quarterly profit for the first time since the start of the pandemic. Caterpillar reported adjusted fourth-quarter earnings of $3.86 per share on Tuesday, compared with analysts’ expectations of $3.97.
Spotify ( SPOT ) reported fourth-quarter results that gave investors a mixed outlook, as the company posted a bigger-than-expected loss and a decline in gross margins. Fourth quarter earnings were missed. Meanwhile, total monthly active users beat expectations at 489 million, versus 478 million expected.
Finally, shares of Pfizer ( PFE ) fell, then recovered after the pharmaceutical giant reported adjusted earnings of $1.14 per share on sales of $24.29 billion. The company said it expects lower sales in 2023, including a steep decline in sales of its COVID vaccine.
Elsewhere in the markets, shares of Carvana ( CVNA ) rose as much as 33% on Monday and rose again in Tuesday trading. According to data from Bespoke Investments, Carvana is currently part of the Russell 1000’s list of 35 most shorted stocks. These stocks are up an average of 18.8% this year.
Meanwhile, after the call, things will quickly turn to technology. Snap ( SNAP ) plans to get an early look at cooking in the world of online advertising, user growth and consumer spending after Microsoft ( MSFT ) signaled a continued slowdown in cloud growth in December.
Meta Platforms ( META ) is due to report quarterly results on Wednesday, while Amazon ( AMZN ), Apple ( AAPL ), Alphabet ( GOOG ) are set to report on Thursday.
Abroad, the International Monetary Fund said Monday it expects the global economy to slow. US economic growth will slow to 1.4% this year as central banks continue to work to tame inflation, the IMF said.
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Dani Romero is a reporter for Yahoo Finance. Follow him on Twitter @daniromerotv:
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