The Dow Jones rose about 200 points on Tuesday as markets expected a broader comeback, with bond yields at multi-month highs and tensions rising in the Middle East.
The Dow Jones Industrial Average (^DJI) climbed about 0.6%, following a six-session losing streak. The S&P 500 (^GSPC) was flat, while the tech-heavy Nasdaq Composite (^IXIC) fell about 0.1%.
The more optimistic tone comes as earnings reports started rolling in before the bell. Shares of United Health ( UNH ) rose more than 5% after the healthcare group beat quarterly profit estimates, even as it said it expects to receive $1.6 billion from a February cyberattack.
Investors were also digesting the big banks’ results, with Bank of America ( BAC ) reporting first-quarter profit down 18% year-over-year as a key revenue source weakened, while shares of Morgan Stanley ( MS ) 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.
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.
Bond yields continued to rise after 10-year Treasury yields (^TNX) hit a 2024 high on Monday. Rates rose early Tuesday by about 4 basis points to about 4.66%.
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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