Dow futures soared on Tuesday, with U.S. stocks eyeing a broader comeback, after a wave of earnings reports lifted a market facing bond yields at multi-month highs and rising tensions in the Middle East East.
Dow Jones Industrial Average (^DJI) futures rose 0.6%, following a six-session losing streak. Futures on the S&P 500 (^GSPC) and the tech-heavy Nasdaq 100 (^NDX) also rallied, hovering above the flatline.
Stocks posted significant losses on Monday as retail sales data fueled expectations that interest rates will stay higher for longer this year. The consensus now is that interest rates should not be cut until September, as the strength of the economy gives the Federal Reserve reason to take its time, although some believe the policy could push policymakers to act sooner.
The major US gauges struck a more optimistic tone as earnings reports started rolling in before the bell. Shares of United Health ( UNH ) rose nearly 7% after the healthcare group beat quarterly profit estimates, even as it said it expects to make $1.6 billion from a February cyberattack.
Investors were digesting the big banks’ results: Bank of America (BAC) reported first-quarter profit fell 18% year-over-year as a key revenue source weakened, while shares of Morgan Stanley (MS) fell rose because they exceeded expectations. Elsewhere, BNY Mellon (BK) posted a profit margin, while Johnson & Johnson (JNJ) reported a revenue loss. Also on the docket are the results of United Airlines (UAL), among others.
Bond yields continued to rise after 10-year Treasury yields (^TNX) hit a 2024 high on Monday. Interest rates rose early Tuesday by about 5 basis points to about 4.65%.
Escalating tensions in the Middle East are still bubbling in the background as investors wait to see how Israel will decide to respond to this weekend’s Iranian attack, while allies push for military restraint.
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