After surging on Tuesday morning, the Dow Jones Industrial Average and other major stock indexes tapped the brakes in the afternoon as the Federal Reserve said it needs more time to deal with stubborn inflation. That means the interest rate cuts investors have been hoping are still coming this year might be delayed.
In an address to a policy forum on U.S.-Canada economic relations, Fed Chair Jerome Powell said recent economic data do not provide confidence that inflation is coming under control. The Fed has maintained a target interest rate of 5.25% to 5.5% since last July, the highest level in 23 years. That followed 11 rate hikes since March 2022 as inflation soared. It has come down considerably from its 2022 heights but remains elevated above the Fed’s preferred target of 2% annual inflation.
The Dow broke a days-long losing stream but closed up only slightly, adding about 64 points, or 0.2%, to end the day at 37,799. The S&P 500 fell 0.2% and the Nasdaq lost 0.1%.
Oil prices 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 stock keeps falling
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 closed down about 2.7% 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 stock pops 10%
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 closed up 10.6%, making Super Micro Computer the day’s best performing stock in the S&P 500. It was added to the index just last month.
Morgan Stanley and Bank of America go different directions on earnings
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 closed up about 2.5%.
On the other hand, Bank of America stock lost 3.5% 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 despite a costly cyberattack
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 5.2% 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 stock falls on earnings
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 and closed down 2.1% following the healthcare giant’s quarterly earnings report.
Trump Media announces a live TV streaming platform — and the stock falls again
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 14%.
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.
Live Nation stock falls on news of a DOJ antitrust lawsuit
Shares of Ticketmaster parent company Live Nation dropped about 7.6% 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 plummets
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%, 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.”
Bitcoin is a rollercoaster before the ‘halving’
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
