The stock market on Tuesday saw mixed results, with the Dow Jones Industrial Average rising significantly while the Nasdaq and S&P 500 experienced declines. The Dow jumped 358 points, or 0.7%, driven by better-than-expected earnings reports from major companies. The Nasdaq dropped 0.9% and the S&P 500 fell slightly.
Several companies reported strong quarterly earnings, contributing to the Dow's rise. Sherwin-Williams (SHW) posted revenue of $6.79 billion and an EPS of $3.70, beating estimates of $3.52, causing its stock to jump almost 6%. Coca-Cola (K) also impressed with an EPS of $0.97 against an expected $0.93, with its stock climbing 2% and revenue reaching $13.38 billion, leading to an increased full-year outlook. UPS and Illinois Tool Works also reported stronger-than-expected profits.
A major factor pulling down the Nasdaq was a deep sell-off in chip stocks. Companies like Micron Technology (MU) dropped 5%, and the VanEck Semiconductor ETF (SMH) was down 3%. Other chip stocks like Astera Labs (ALAB), Seagate Technology (STX), Advanced Micro Devices, and Applied Materials also experienced losses. This downturn is attributed to concerns about the sustainability of artificial intelligence growth and progress in China's chipmaking equipment capabilities, which could threaten global chipmaking leaders, as noted by equity analyst Jing Jie Yu of Morningstar.
Investors are also keenly awaiting the Federal Reserve's two-day policy meeting, which began on Tuesday and concludes on Wednesday. While traders largely expect the Fed to hold rates steady, a rate hike remains a possibility, making this one of the most challenging policy decisions in years. The market will also be closely watching upcoming earnings reports from major tech companies like Amazon (AMZN), Meta Platforms (META), Apple (AAPL), and Microsoft (MSFT) this week, with a focus on their profit margins and capex spending. Oil prices also continued to fall, with West Texas Intermediate losing 0.92% and Brent crude falling 1.56% to $80.71, partially due to peace talks regarding the Iran-U.S. conflict and a reopening of the Strait of Hormuz.
