Stocks were choppy on Tuesday as traders awaited earnings due after the Google parent company's closing bell alphabet (GOOGL) and Microsoft (MSFT) and also looked ahead to tomorrow's interest rate announcement from the Federal Reserve.
The blue chip Dow Jones Industrial Average rose 0.4% to 38,467, while the broader S&P 500 fell less than 0.1% to 4,924. The tech-heavy one Nasdaq Composite fell 0.8% to 15,509.
In economic news, consumer confidence rose to a two-year high at the start of 2024, supported by easing inflation and strong growth. The Conference Board's consumer confidence index rose to 114.8 in January, up from a revised reading of 108.0 in December. That was the highest level since the end of 2021 and the third consecutive monthly increase, the Conference Board said.
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“The rise in consumer confidence in January likely reflects slower inflation, expectations of lower interest rates and generally favorable employment conditions as companies continue to stockpile workers,” Dana Peterson, chief economist at the Conference Board, said in a news release.
Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, said the data can be summed up in one line: “Consumers are showing little sign of fatigue.”
Rising inventories and falling gas prices “likely explain much of the recent rise in consumer sentiment,” Allen notes. “But the sentiment trend is also likely to be boosted by the ongoing sharp decline in inflation and the recent decline in mortgage rates,” the economist adds. “Both will probably move on.”
Elsewhere in the economic calendar, U.S. home prices rose for a tenth straight month, hitting a record high in November. The S&P CoreLogic Case-Shiller 20-city home price index rose 0.1% in November from the previous month. Property prices rose despite high mortgage rates due to lower offers.
Tech Gains, Fed Ready
Markets have a lot to digest after the bell on Tuesday and in the coming sessions. Magnificent 7 stock gains begin tonight with Microsoft and Alphabet. By late Thursday, five mega-cap stocks in the technology and communications services sector with a combined market value of more than $10 trillion will have reported results.
This flurry of potentially market-moving tech gains coincides with the next Fed meeting. The Federal Open Market Committee (FOMC) is widely expected to leave interest rates unchanged at a 22-year high on Wednesday afternoon.
What market participants really care about is the timing of the Fed's first quarter-point rate cut. Fed Chairman Jerome Powell is expected to scale back expectations for a rate cut in March.
“This week's Fed meeting will likely be a pause,” said Lauren Goodwin, economist and chief market strategist at New York Life Investments.
SLB slips on Saudi oil cap
General Motors (GM), JetBlue (JBLU) and United Parcel Service (UPS) were stocks in focus today following the release of their results. SLB (SLB) hasn't released earnings but has also been in focus, and for unfortunate reasons.
Shares of the oilfield services giant fell more than 10% at one point during the session after Saudi Arabia's state oil company cut its maximum capacity target, sparking concerns about global demand.
SLB pared its daily loss but is still down more than 13% over the past 52 weeks due to concerns about global energy demand. Peers Baker Hughes (BKR) and Halliburton (HAL) also collapsed on Tuesday.
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