U.S. stocks experienced a second consecutive day of gains on Tuesday, helping to offset the challenges faced in April. The S&P 500 surged by 1.2%, recovering from a recent losing streak, while the Dow Jones Industrial Average climbed 0.7% and the Nasdaq composite saw a 1.6% jump.
The market was supported by a weaker-than-expected report on U.S. business activity, which provided some relief amidst economic uncertainties. The hope remains for the economy to avoid a severe recession while not overheating to cause inflationary pressures.
A flood of earnings reports influenced trading, with several companies surpassing analysts' expectations. GE Aerospace, Kimberly-Clark, General Motors, and Danaher all saw stock price increases after positive earnings reports. However, Nucor and MSCI experienced declines after falling short of forecasts.
JetBlue Airways, despite exceeding expectations for the latest quarter, faced a stock drop due to lower revenue forecasts and concerns about competition in Latin America.
After the trading day ended, Tesla reported its first-quarter results, marking the beginning of earnings season for the 'Magnificent Seven' stocks that drove significant gains in the S&P 500 last year.
Market analysts emphasize the importance of upcoming earnings reports, particularly from the 'Mag 7' companies, in determining market direction. The Federal Reserve's indication of potentially maintaining high interest rates to combat inflation has added to market uncertainties.
The report suggesting a slowdown in overall business activity in the U.S. was well-received by investors, potentially paving the way for future interest rate cuts by the Fed. This led to a decline in Treasury yields, providing some relief to stock markets.
Stock indexes in Europe rose, while Asian markets showed mixed results. Hong Kong saw a 1.9% increase, while Shanghai experienced a 0.7% decline.
