Wall Street stocks ended lower in choppy trading on Tuesday as Treasury yields climbed, with investors weighing the likely path of interest rates in a resilient U.S. economy with persistent inflation.
Market Snapshot
The Dow Jones Industrial Average rose 63.86 points, or 0.17%, to 37,798.97, the S&P 500 lost 10.41 points, or 0.21%, to 5,051.41 and the Nasdaq Composite lost 19.77 points, or 0.12%, to 15,865.25.
Market Movers
UnitedHealth reported first-quarter adjusted earnings of $6.91 a share, topping analysts’ estimates of $6.61. Revenue of $99.8 billion beat forecasts of $99.2 billion. UnitedHealth reported a net loss of $1.53 a share in the quarter which included an impact of 74 cents a share from the hack of the payments tools operated by its subsidiary Change Healthcare. The stock rose 5.3%.
Live Nation Entertainment stock declined 7.5% following a report from The Wall Street Journal that the Justice Department was preparing to sue the parent of Ticketmaster, alleging the company has leveraged its dominance for ticketing live events and undermined competition. The suit could be filed as soon as next month, the Journal reported, citing people familiar with the matter.
Trump Media & Technology Group stock was down 14%, after falling 18% on Monday after the parent company of the Truth Social platform filed for the sale of a large amount of shares. On Tuesday, the company announced plans to launch a new live TV streaming network.
Tesla stock declined 2.7%. Shares of the electric-vehicle maker dropped 5.6% on Monday after CEO Elon Musk said Tesla was planning to lay off more than 10% of its global workforce, and Drew Baglino, Tesla’s head of powertrain and energy engineering, announced he was stepping down.
Bank of America earned 83 cents a share on an adjusted basis in the first quarter, beating analysts’ estimates of 76 cents. Revenue fell to $25.8 billion from $26.2 billion a year earlier but topped consensus of $25.5 billion. Net interest income in the period fell 3% to $14.03 billion. Shares were down 3.5%.
Shares of Morgan Stanley rose 2.5% after the investment bank’s earnings topped Wall Street expectations. The bank reported a return on tangible common equity, the closely watched measure of profitability known as ROTCE, of 19.7%, up from 16.9% a year earlier and closer to Morgan Stanley management’s own target of 20%.
PNC Financial Services Group stock was down 2% after profit and revenue declined in the regional bank’s first quarter. Net interest income—a key metric among banks—of $3.26 billion missed consensus estimates of $3.29 billion.
Johnson & Johnson posted first-quarter adjusted earnings of $2.71 a share, better than Wall Street expectations. The company said it now expects full-year adjusted earnings in a range of $10.57 to $10.72 a share, compared with a previous range of $10.55 to $10.75. The stock fell 2.1%.
Shares of Super Micro Computer rose 11% to $976.30 after analysts at Loop Capital raised their price target on shares of the server maker to $1,500 from $600 and maintained a Buy rating.
DraftKings stock was up 2.8 to $44.94. Analysts at Goldman Sachs initiated coverage on shares of the sports-betting company with a Buy recommendation and price target of $60.
Market News
Powell Dials Back Expectations on Rate Cuts
Firm inflation during the first quarter has called into question whether the Federal Reserve will be able to lower interest rates this year without signs of an unexpected economic slowdown, Chair Jerome Powell said Tuesday.
His remarks indicated a clear shift in the Fed’s outlook following a third consecutive month of stronger-than-anticipated inflation readings, which derailed hopes that the central bank might be able to deliver pre-emptive rate cuts this summer. Officials had previously said they were looking for greater confidence that inflation was returning to their target and were optimistic another month or two of data might meet that standard.
“The recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence,” Powell said at a moderated question-and-answer session in Washington. The remarks were his first public comments since an inflation report last week sent stocks sliding as investors recalibrated their rate-cut expectations.
'Grand Theft Auto' maker Take-Two to let go 5% of staff, scrap some projects
Take-Two Interactive Software will lay off about 5% of its workforce, or around 600 employees, the publisher of the "Grand Theft Auto" franchise said on Tuesday, as the video-gaming industry extends its more than two-year long job cuts.
The company will also scrap several projects in development as part of a cost-reduction plan, which is expected to result in total charges of up to $200 million. It declined to name the projects that have been canceled .