On the evening of the 16th, Beijing time, US stocks opened with mixed ups and downs on Tuesday. The Dow is expected to end the previous six consecutive trading days of decline. The market is concerned about the financial reports of Morgan Stanley and others and the development of the situation in the Middle East. Federal Reserve Chairman Powell will speak today. Federal Reserve Governor Jefferson said he expects inflation to continue to fall as the Federal Reserve continues to implement restrictive policies.
As of press release, the Dow Jones index was up 0.29%, the Nasdaq index was down 0.16%, and the S&P 500 was down 0.15%.
The stock price of UnitedHealth (UnitedHealth), a component of the Dow Index, surged, and the company's revenue for the first fiscal quarter was better than expected.
Johnson & Johnson (Johnson & Johnson), another component of the Dow Jones Index, reported mixed quarterly results, which led to a slight drop in stock prices.
Morgan Stanley (Morgan Stanley) and Bank of America (Bank of America) both announced that profits and revenue surpassed Wall Street's general expectations.
The situation in the Middle East remains the focus of the market. The geopolitical situation was highly tense after Iran launched large-scale drone and missile attacks on Israel last Saturday night. Israel has since vowed to retaliate.
Many countries called on both sides to remain calm and warned that the Middle East could easily trigger a larger war.
U.S. stocks closed lower on Monday, and the Dow recorded its sixth consecutive trading day of decline. Both the S&P 500 index and the NASDAQ closed down more than 1%. On the same day, the US dollar broke through 154 against the yen, and the yield on US Treasury bonds surged. The yield on 10-year US Treasury bonds surpassed 4.6% and hit a new high since November last year. Investors were worried by news of the escalation of tension in the Middle East that day, and the Chicago Board Options Exchange Volatility Index VIX (commonly known as the Panic Indicator) closed at its highest point since October.
Despite this, some market observers suggest investors stay calm and stick to the end, saying that a resilient economy and a strong labor market may continue to support the stock market.
Lauren Goodwin, chief market strategist at New York Life Investments, said, “We won't see a continued downturn in the US stock market unless we see problems with corporate profits and the labor market. These haven't happened yet.”
He said, “Now we are seeing tension in the market because stocks are highly valued. There's a lot of uncertainty. This has been the case for months.”
In terms of economic data on Tuesday, the US Department of Commerce reported that new home construction and construction permits in March fell short of expectations.
After seasonal adjustments, the total number of new private homes started this month was 1.32 million units, lower than the Dow Jones forecast of 1.48 million units. The number of new housing developments decreased by 14.7% from February and 4.3% from the same period last year.
Construction permits in March fell 4.3% month-on-month to 1.46 million units, lower than the estimated 1.51 million units.
The total number of completed housing units was 1.47 million, down 13.5% from February.
Federal Reserve Chairman Powell will deliver a speech on Tuesday.
Federal Reserve Governor Philip Jefferson (Philip Jefferson) said on Tuesday that he expects inflation to continue to fall as the Federal Reserve continues to implement restrictive policies.
While discussing how policy formulation has changed over the years, Jefferson said, “My basic forecast remains that inflation will fall further, policy interest rates will stabilize at current levels, the labor market will remain strong, and labor demand and supply will continue to be rebalanced.”
“Of course, the outlook is still quite uncertain, and if upcoming data shows that inflation lasts longer than I currently expect, then it would be appropriate to maintain the current restrictive policy stance for a longer period of time,” he added.
The market currently expects the Federal Reserve to stay on hold until September and then slowly begin cutting interest rates.
Individual stocks in focus
Star Technology stocks had mixed ups and downs. Tesla fell nearly 4%, Micron Technology and TSMC fell about 2%, and Netflix and Nvidia rose more than 1%.
Most popular Chinese securities fell, with NIO falling nearly 4%, JD falling more than 2%, and Ali and Pinduoduo falling more than 1%.
$Tesla (TSLA.US)$It fell more than 4%. Following a 10% global layoff, Baglino, a core executive and senior vice president of powertrain and energy engineering, confirmed his departure.
$Morgan Stanley (MS.US)$It rose more than 2%. Net revenue for Q1 was US$15.1 billion, better than the market estimate of US$14.46 billion. Investment banking revenue increased 16% year over year.
$UnitedHealth (UNH.US)$It rose nearly 7%, with Q1 revenue of US$99.8 billion and adjusted earnings per share of US$6.91, all exceeding market expectations.
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