4:20pm: Markets surge in January's waning hours
The Dow closed up 387 points, 1.1% at 34,086, the Nasdaq Composite added 191 points, 1.7%, to 11,585 and the S&P 500 improved 59 points, 1.5%, to 4,077.
The last session of January closed a banner first month of 2023 for the benchmarks. The Nasdaq Composite added more than 10% this month, while the S&P 500 and Dow rallied 6.2% and 2.8%, respectively. For the Nasdaq, January was the best-performing month since July, and for the S&P, this was the best January since 2019.
That could be a sign of things to come, according to AXS Investments CEO Greg Bassuk.
“We’re seeing all of these historical major drivers of the market starting to all point in a direction that we think would be supportive of equity market gains over the next few months,” Bassuk said, as reported by CNBC.
12.05pm: S&P 500 on track for best January since 2019
US stocks advanced in noon trading following a flurry of corporate earnings and one day ahead of the latest Federal Reserve rate decision.
At midday, the Dow gained 77 points to 33,794, while the S&P 500 added 25 points at 4,043 and the tech-heavy Nasdaq moved up 106 points to 11,499.
“We’re seeing all of these historical major drivers of the market starting to all point in a direction that we think would be supportive of equity market gains over the next few months,” AXS Investments CEO Greg Bassuk said.
Notable movers included shares of General Motors Co, which jumped more than 7% after the automaker's latest financial results beat expectations, with 4Q earnings of $2.12 per share on $43.11 billion in revenue.
9.35am: Caution prevails ahead of Fed’s first rate hike of 2023
US stocks edged higher at the open ahead amid a flurry of earnings released this morning from major corporations including Pfizer Inc, McDonald’s Corporation, General Motors Company, and Exxon Mobil Corporation.
Just after the market opened, the Dow Jones Industrial Average had added 19 points or 0.1% at 33,736 points, the S&P 500 was up 10 points or 0.3% at 4,028 points, and the Nasdaq Composite had gained 42 points or 0.4% at 11,443 points.
Spotify Technology SA shares jumped 10.3% after the music streaming provider posted a jump in subscribers but a surge in losses.
GM added 6.2% after the carmaker’s fourth quarter sales and profits topped expectations.
On the flip side, Exxon fell 2.7%, Caterpillar Inc shed 4%, and McDonald’s slipped 1.6% as their respective earnings failed to meet investors’ expectations.
Swissquote Bank senior analyst Ipek Ozkardeskaya noted that stock investors had kicked off the week on a cautious note as the Federal Reserve is expected to kill joy when it announces its latest interest rate hike decision tomorrow, and earnings may not save the day.
“US equities kicked off the week on a negative note, as many investors preferred booking profits before the deluge of earnings announcements and the Fed decision,” Ozkardeskaya said.
“And they are certainly not wrong to be scared, because the Fed expectations became increasingly dovish in January, as investors saw the easing inflation figures combined with softening economic activity.”
6.30am: Markets betting on 25 bps rate hike
Wall Street is expected to end the month on the back foot as investors take some profits following January’s strong run and await the outcome of the US Federal Reserve’s first interest rate decision of 2023, due on Wednesday.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.4% in Tuesday pre-market trading, while those for the broader S&P 500 index dropped 0.5%, and contracts for the Nasdaq-100 shed 0.6%.
The major US indexes all finished in the red on Monday, with corporate earnings reports also weighing on the market as well as the rate hike worries. At the close, the DJIA was down 0.8% at 33,717, the S&P 500 dropped 1.3% to 4,018 and the Nasdaq Composite lost 2% to 11,394, which was its biggest daily fall so far for 2023.
Investors are starting to "show some fear" as the Federal Open Market Committee (FOMC) starts its two-day rate-setting meeting today, commented Neil Wilson, chief market analyst at Markets.com.
“There is genuine doubt among bulls here – they know the Fed can drive a horse and coaches through their recovery by pushing back strongly against the loosening in financial conditions we have seen in recent weeks,” he added. “Stocks have had a good run higher this year so some profit-taking ahead of the uncertainty of the Fed makes sense too.”
Wilson noted that the market is currently pricing in a 98.6% chance the FOMC votes to raise rates by 25 basis points, and a roughly 85% chance for one last hike in March. This setup creates ample opportunity for a hawkish surprise from the Fed - including how high rates will peak and how long they will stay there, he said.
Companies reporting quarterly earnings today include ExxonMobil, Samsung, Pfizer, McDonald's and Caterpillar, among others.