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Wall Street closed higher on Tuesday as market participants assessed strong fourth-quarter earnings despite challenges from rising yields and inflation, putting the Fed’s strategy to the test. The Nasdaq Composite, the Dow, and the S&P 500 all ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 1.2% or 537.98 points to close at 44,025.81. Within the 30-stock index, 23 components ended in positive territory, while seven ended in the negative zone.
The tech-heavy Nasdaq Composite advanced 126.58 points or 0.6% to 19,756.78.
The S&P 500 gained 0.9%, or 52.58 points, to end at 6,049.24. Ten of the 11 sectors of the benchmark index ended in positive territory. The Industrials Select Sector SPDR (XLI) gained 2.1%, while the Energy Select Sector SPDR (XLE) fell 0.5%.
The fear-gauge CBOE Volatility Index (VIX) decreased 4.7% to 15.06. A total of 15.42 billion shares were traded on Tuesday, lower than the last 20-session average of 15.47 billion. The S&P 500 posted 41 new 52-week highs and no new lows. The Nasdaq Composite recorded 119 new highs and 78 new lows.
Rising Yields and Inflation Test Fed’s Strategy
The U.S. economy and the decision of the Federal Reserve meeting on Jan. 28-29 are preoccupied with the results of new Trump administration policies and the challenges of rising bond yields. Inflation is almost at the 2% target, the unemployment rate is 4.1%, and job creation totaled 250,000 in December, which is a good sign for the economy.
However, the strong Treasury yields of 10-year rates in the mid-4% range and mortgage rates of 7% could strain growth. The Fed will likely maintain its rates at 4.25-4.50% but the focus will be on Chair, Jerome Powell’s comments on the risks of change in policy, such as those in trade and immigration, which the central bank will have to navigate in an uncertain environment.
Strong Q4 Earnings Results
3M Company (MMM - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.68 per share, which surpassed the Zacks Consensus Estimate of $1.66. Revenues of $6 billion beat the Zacks Consensus Estimate of $5.8 billion.
The Charles Schwab Corporation (SCHW - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.01 per share, beating the Zacks Consensus Estimate of $0.90. Revenues of $5.33 billion beat the Zacks Consensus Estimate by 2.82%.
Consequently, shares of 3M Company and The Charles Schwab Corporation rose 4.2% and 5.9%, respectively. Charles Schwab Corporation carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
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Stock Market News for Jan 22, 2025
Market News
Wall Street closed higher on Tuesday as market participants assessed strong fourth-quarter earnings despite challenges from rising yields and inflation, putting the Fed’s strategy to the test. The Nasdaq Composite, the Dow, and the S&P 500 all ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 1.2% or 537.98 points to close at 44,025.81. Within the 30-stock index, 23 components ended in positive territory, while seven ended in the negative zone.
The tech-heavy Nasdaq Composite advanced 126.58 points or 0.6% to 19,756.78.
The S&P 500 gained 0.9%, or 52.58 points, to end at 6,049.24. Ten of the 11 sectors of the benchmark index ended in positive territory. The Industrials Select Sector SPDR (XLI) gained 2.1%, while the Energy Select Sector SPDR (XLE) fell 0.5%.
The fear-gauge CBOE Volatility Index (VIX) decreased 4.7% to 15.06. A total of 15.42 billion shares were traded on Tuesday, lower than the last 20-session average of 15.47 billion. The S&P 500 posted 41 new 52-week highs and no new lows. The Nasdaq Composite recorded 119 new highs and 78 new lows.
Rising Yields and Inflation Test Fed’s Strategy
The U.S. economy and the decision of the Federal Reserve meeting on Jan. 28-29 are preoccupied with the results of new Trump administration policies and the challenges of rising bond yields. Inflation is almost at the 2% target, the unemployment rate is 4.1%, and job creation totaled 250,000 in December, which is a good sign for the economy.
However, the strong Treasury yields of 10-year rates in the mid-4% range and mortgage rates of 7% could strain growth. The Fed will likely maintain its rates at 4.25-4.50% but the focus will be on Chair, Jerome Powell’s comments on the risks of change in policy, such as those in trade and immigration, which the central bank will have to navigate in an uncertain environment.
Strong Q4 Earnings Results
3M Company (MMM - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.68 per share, which surpassed the Zacks Consensus Estimate of $1.66. Revenues of $6 billion beat the Zacks Consensus Estimate of $5.8 billion.
The Charles Schwab Corporation (SCHW - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.01 per share, beating the Zacks Consensus Estimate of $0.90. Revenues of $5.33 billion beat the Zacks Consensus Estimate by 2.82%.
Consequently, shares of 3M Company and The Charles Schwab Corporation rose 4.2% and 5.9%, respectively. Charles Schwab Corporation carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.