Financial Markets Wall Street – NEW YORK (AP) — Technology stocks experienced a rally on Tuesday, propelling the Nasdaq composite to a record high. Despite this, the rest of Wall Street saw mixed trading as homebuilders and Ford Motor’s stock prices fell following their latest profit reports.
The S&P 500 increased by 0.2%, moving closer to its all-time high set earlier this month, even with most of the stocks in the index experiencing a decline for the day.
Big Tech stocks, such as Alphabet, which rose 1.8% ahead of its profit report, helped to mask weaknesses in other areas of the market. This pushed the Nasdaq composite up by 0.8%, surpassing its last all-time high set in July. In contrast, the Dow Jones Industrial Average fell by 154 points, or 0.4%.
Other market heavyweights like Microsoft and Meta Platforms were key drivers in pushing the S&P 500 upward. They helped to counterbalance an 8.4% drop for Ford Motor, which anticipates its full-year underlying profit measure to be at the lower end of its forecasted range due to high warranty expenses and other costs.
JetBlue Airways saw a 17.1% loss, despite better-than-expected results for the latest quarter. The carrier expects its revenue to decrease between 3% and 7% in the last quarter of 2024 compared to the previous year, attributing the decline to Hurricane Milton and the upcoming U.S. presidential election.
D.R. Horton plummeted by 7.2% after reporting weaker profit and revenue for the latest quarter than analysts had expected. Executive Chairman David Auld mentioned that potential homebuyers are waiting for more affordable mortgage rates, causing them to hold back on purchases.
The S&P 500 closed at 5,832.92, up 9.40 points. The Dow Jones Industrial Average fell to 42,233.05, down 154.52 points, while the Nasdaq composite reached 18,712.75, up 145.56 points.
Mortgage rates have been on the rise recently due to the 10-year Treasury yield increasing. Yields have climbed as reports continue to show the U.S. economy remaining stronger than expected.
Traders have adjusted their expectations for Federal Reserve interest rate cuts, as the economy’s strength and the focus on managing inflation have led to a more cautious approach. There is even a slim chance that the Fed will keep its main interest rate steady at its upcoming meeting, as per data from CME Group.
This follows the Fed’s larger-than-usual rate reduction in September, with many traders previously anticipating another significant cut in November.
Investor reactions to the potential re-election of former President Donald Trump have influenced market trends. Yields have climbed as Trump’s chances of re-election improve, with economists suggesting that a Trump win could increase long-term inflation, subsequently pushing interest rates higher.
Trump Media & Technology Group, closely tied to Trump’s re-election odds, saw its stock price surge 8.8% to $51.51 on Tuesday. The stock’s rapid movement led to temporary trading halts. The company, which is the parent of Trump’s Truth Social platform, has been on an upswing since reaching a low of around $12 in late September.
Treasury yields experienced a slight easing after reducing gains from earlier in the day. The 10-year yield dropped to 4.25% from 4.28% on Monday, still significantly higher than the 3.60% mark in mid-last month. Historically, Treasury yields, like stocks, have been volatile leading up to Election Day, only to stabilize afterward, irrespective of the winning party.
International stock markets showed mixed results, with European indexes dipping after Asian markets mostly rose, except for a 1.1% decline in Shanghai stocks.
Crude oil prices also saw a decline, erasing earlier gains and adding to the sharp 6.1% drop from the previous day. Brent crude, the global benchmark, fell by 0.4%.
