After surging on Tuesday morning, the Dow tapped the brakes in the afternoon as the Fed said it needs more time to deal with stubborn inflation—which means interest rate cuts are likely to be delayed. In an address to a policy forum on U.S.-Canada economic relations, Fed Chair Jerome Powell said that recent economic data do not provide confidence that inflation is coming under control.
A target interest rate of 5.25% to 5.5% has been maintained by the Fed since July 2023, the highest level in 23 years. Eleven consecutive rate hikes have taken place since March 2022.
The Dow Jones Industrial Average was up 117 points, or 0.3%, to 37,860 on Tuesday afternoon. The S&P 500 and the Nasdaq were mostly flat by the end of the day.
It’s not all dark and gloomy, as oil prices have dropped below $90 per barrel despite the tensions in the Middle East. Brent futures for June delivery settled at $89.96 a barrel, down 0.16%. U.S. crude futures for May delivery fell 0.12% to $84.76 a barrel.
Tesla continues riding on a bumpy road
Tesla stock continued its months-long descent on Tuesday after mass layoffs swept through the company’s operations in Texas and executives resigned. The stock fell nearly 2.7% to $157 in late afternoon, and its valuation briefly fell below $500 billion Tuesday, before bouncing back to about $500.71 billion. Tesla’s market capitalization hadn’t dropped below $500 billion since late April 2023.
Super Micro Computer jumps over 7%
Super Micro Computer stock rallied on Tuesday after a Wall Street analyst hiked his price target on the shares from $600 all the way to $1,500. Shares in the AI hardware were up more than 7% in late-afternoon trading, making Super Micro Computer the day’s best performing stock in the S&P 500. It was added to the index just last month.
Banks release earnings reports
Morgan Stanley reported net revenues of $15.1 billion for the first quarter, up 4% from $14.5 billion a year ago. Morgan Stanley’s revenues outperformed in key areas, including wealth management, equities trading, and investment banking, but fell short in investment management—its smallest unit. The stock was up nearly 3% to $89 in the late afternoon.
On the other hand, Bank of America stock was down 3.4% to $34 by the end of the day as its profits plunged 18% in the first quarter compared with a year earlier. The bank posted a net income of $7.2 billion, or $0.83 per share (excluding costs tied to the Federal Deposit Insurance Commission’s special assessment), breezing past the $0.76 estimate compiled by FactSet.
UnitedHealth stock pops up
UnitedHealth Group, the largest health insurance company in the U.S., was among the top performers on Tuesday after it reported higher-than-expected revenue amid the fallout of a massive cyberattack earlier this year.
UnitedHealth stock rose 5.6% to about $470 late Tuesday afternoon, following the insurer’s first quarterly earnings report since hackers targeted is subsidiary Change Healthcare. Change is a healthcare record and payment manager that processes 14 billion transactions a year.
“The core story at UnitedHealth Group remains our colleagues delivering improved experiences for the people we serve and driving balanced growth even while swiftly and effectively addressing the attack on Change Healthcare,” said UnitedHealth Group CEO Andrew Witty in a press release.
Johnson & Johnson’s falls after quarterly reports
Johnson & Johnson’s recent investments in medical devices helped boost sales, but the company’s total revenue in the first quarter of the year failed to beat Wall Street expectations. Its stock reached its new 52-week low today by falling 1.7% to about $145 in the afternoon, following the healthcare giant’s recent quarterly earnings report.
Trump Media announces a live TV streaming platform
Shares of Trump Media & Technology Group, the company behind former President Donald Trump’s social media platform Truth Social, fell sharply again Tuesday after it announced that it’s launching a streaming platform. Truth Social will stream live TV, the company said, including news, religious channels, “family-friendly content,” as well as “other content that has been canceled, is at risk of cancellation or is being suppressed on other platforms and services.” Trump Media stock dropped more than 13% to $23 per share in late afternoon trading Tuesday following the announcement.
BuzzFeed bets on reverse stock split
Shares of BuzzFeed fell by more than 5% on Tuesday following news that the company would seek shareholder approval for a reverse stock split. The struggling media company has taken the step to avoid being delisted from the stock market. Its share value has plummeted to just 38 cents as of this writing, which is below the minimum $1 bid requirement for Nasdaq listing.
The DOJ slaps Live Nation with lawsuit
Shares of Ticketmaster parent company Live Nation dropped more than 6% Tuesday following a report that the Department of Justice is preparing to sue the company for alleged antitrust violations. The Wall Street Journal, citing unnamed sources familiar with the matter, reports that the DOJ will accuse Live Nation of harming competitors by “leveraging its dominance” in the marketplace. Live Nation is the largest concert promoter and ticketing company in the U.S.
Dr. Marten’s stock is plummeting
Consumers in the U.S. are holding off on purchasing boots—and Dr. Martens is bearing the brunt. Dr. Martens stock was down by more than 28% in the later afternoon, all the way to $0.85 per share, after the company warned of a challenging fiscal year 2025 outlook and a decline in its U.S. wholesale market. Trading of the company’s shares on the London Stock Exchange was briefly suspended Tuesday.
The footwear company said it anticipates its U.S. wholesale revenue to be down by double digits in 2025, in part because its order book for the autumn and winter season, which makes up about half of its sales in the area, is “significantly down.”
Crypto market is volatile
Bitcoin is going through a topsy-turvy phase as the so-called Bitcoin “halving” event is on the horizon. In the late afternoon, the top cryptocurrency was trading at $62,000 after a 1.5% dip. Ether was trading just above $3,000 on Tuesday after experiencing a more than 4% decline in the past 24 hours.
–Rocio Fabbro, Bruce Gil, William Gavin, and Francisco Velasquez contributed to this article