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Author: Yasin Ebrahim
Investing.com – The S&P 500 fell on Tuesday as attempts to make another turn of the day faded as technology stocks renewed pressure on the Federal Reserve’s monetary policy update.
It fell 1.2%, but closed above session lows. A decrease of 0.2%, or 66 points, after falling by about 800 points per day. The Nasdaq fell 2.3%.
The Federal Reserve will begin its two-day meeting on Tuesday. While the Fed is expected to hold its benchmark rate, investors are waiting to breathe a sigh of relief to see if the final prices for a more aggressive tightening of monetary policy are guaranteed.
Investors will see “Fed Chairman Jerome Powell as he continues to face the risk of inflation and continue to face any kind of communication about ending the cut early,” John Luke Tyner, portfolio manager at Aptus Capital Advisors, told Investing.com in an interview. Tuesday. If the Fed suggests “any plan to reduce the amount of accommodation that will be used in the balance sheet”.
Expecting a hawkish tone in the Fed’s policy, US bond yields rose, flirting 1.8% briefly, boosting rate-sensitive sectors such as banks.
Zions (NASDAQ :), Discover Financial Services (NYSE 🙂 and American Express (NYSE 🙂 led the financial movement, with the latter gaining additional momentum after the quarterly results were given in both the top and bottom lines.
American Express Earnings of $ 2.18 per share were better than expected with revenue of $ 12.15 billion, with Wall Street above estimates of $ 1.87 and $ 11.5 billion, respectively.
Energy, however, rose sharply by more than 3%, driven by fears of potential supply disruptions as geopolitical tensions continue to rise in Eastern Europe and the Middle East.
The gains in cyclical equities such as energy and finance contrasted with losses in growth sectors such as technology, which may follow a lower trend in the midst of a rising interest rate environment.
But there could be a break for those who boast strong profits and strong balances for higher-quality tech names.
“Rising interest rates can have an impact on a non-profit company, but for companies like Microsoft or Apple and for some high-quality growth names, 10 and a half percent of 10-year profit really matters,” Tyner said.
Microsoft (NASDAQ 🙂 fell more than 2% before the quarterly results after the closing bell. Its cloud business, Azure, is expected to improve its results in the fourth quarter.
“It simply came to our notice then […] The constant Azure boost and the M365 driving in the back wind, ”Deutsche Bank said in a statement.
International Business Machines (NYSE 🙂 rose more than 5% in both the top and bottom lines, despite the growth driven by sales to Kyndryl.
In other earnings news, General Electric (NYSE 🙂 fell 6% after reporting Wall Street lost revenue after supply chain disruptions weighed on performance.
Johnson & Johnson (NYSE :), meanwhile, reported mixed quarterly results as revenues fell outside analysts ’calculations, but the company predicted that its vaccine against covid would generate $ 3 billion and $ 3.5 billion in sales in 2022. Its shares rose more than 2%. .
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