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Stock Market Today: S&P 500 closes lower as Powell signals higher for longer rates

Published 16/04/2024, 00:46
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Investing.com -- The S&P 500 closed lower Tuesday, and investors had to contend with wild swings after Federal Reserve Jerome Powell signaled the need for rates to remain higher for longer following recent inflation data that surprised to the upside.  

At 15:00 ET (20:00 GMT), the Dow Jones Industrial Average was up 63 points, or 0.2%, while the S&P 500 fell 0.2% and NASDAQ Composite fell 0.1%.

Treasury yields higher as Powell signals higher for longer rates

“The recent data have clearly not given us greater confidence," to consider starting the rate cut cycle, instead the data "indicate that it’s likely to take longer than expected to achieve that confidence."

The Fed has previously flagged the need for greater confidence, led by incoming economic data, that inflation is on sustainable path lower to begin cutting rates. 

The remarks further dented investor hopes on sooner rate cuts, pushing Treasury yields higher, with the yield on the 2-year Treasury topping 5% for the first time since November. 

Unitedhealth, Morgan Stanley shine on earnings stage, Bank of America, Johnson & Johnson falters

UnitedHealth Group (NYSE:UNH), a major Dow component, jumped 5% after the health insurer maintained its 2024 forecast even as it disclosed a potential hit of up to $1.6 billion this year related to a data breach at its Change Healthcare (NASDAQ:CHNG) unit, in its first full public disclosure of the financial impact of the cyberattack. The company also reported first-quarter revenue that topped Wall Street estimates.   

Bank of America and Morgan Stanley (NYSE:MS) continued the last wave of major bank earnings, but it was the latter that delivered a impressive performance, underpinned in its investment banking and sales and trading business. Bank of America Corp (NYSE:BAC) reported quarterly results that beat analysts estimates, but the stock fell nearly 4% amid concerns about its valuation given its recent run up. 

Given the share price "outperformance over the past approximately six months, we no longer see sufficient upside to recommend the shares," HSBC said in a research note Tuesday, flagging various risks including deposit cost pressure and deposit outflows.

Johnson & Johnson (NYSE:JNJ) stock slipped about 2% after the healthcare giant reported disappointing first-quarter revenue numbers as sales from its blockbuster psoriasis drug Stelara fell short of expectations.

Tesla market cap dips below $500B as bears strengthen grip

Tesla Inc (NASDAQ:TSLA) fell more than 2%, taking its market cap below $500B, as the bearish bets on the company navigates a period of waning demand that has forced it to announce cuts of more than 10%. Further souring the sentiment on the stock, the electric vehicle maker delayed cybertruck deliveries in recent days, the Wall Street Journal reported Tuesday, citing buyers. 

Live Nation Entertainment Inc (NYSE:LYV), meanwhile, fell more than 7% after the Wall Street Journal reported that the U.S. Department of Justice is set to file an antitrust lawsuit against the concert promoter alleging that the company used its market dominance to harm competition for live events. 

(Peter Nurse, Ambar Warrick contributed to this article.)

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