US Stocks Pause As Treasury Yields, Dollar Surge On Trimmed Fed Rate Cut Bets: What's Driving Markets Tuesday?

Wall Street took a breather on Tuesday, with the major U.S. stock indices trading near the flatline or showing slight declines during midday trading in New York as investors closely await a series of relevant earnings reports and crucial economic data slated for the remainder of the week.

Both the S&P 500 and the Nasdaq 100 remained stable at their respective all-time highs, while the Dow experienced a slight decrease of 0.4%. Small caps, as represented by the iShares Russell 2000 ETF IWM, weakened by 0.7%.

The dollar and Treasury yields moved higher, likely exerting some resistance on the stock market’s rally. The likelihood of a Fed rate cut in March has decreased to 40% and traders now anticipate a total of five rate cuts, down from six, by December 2024.

With yields rising across various Treasury maturities, the iShares 20+ Year Treasury Bond ETF TLT declined by 1.1%.

Chinese stocks traded in New York saw a strong jump as Beijing announced measures totaling $278 billion to stabilize the country’s troubled stock market. Both Alibaba Group Holdings Ltd. BABA and Baidu Inc. BIDU rose 6.7%, while electric vehicle maker NIO Inc. NIO gained 4.5%.

Bitcoin BTC/USD remained relatively flat, after reaching intraday lows at $38,550, while gold experienced a slight increase of 0.3%.

Tuesday’s Performance In US Major Indices, ETFs

Major Indices	Price	%
Nasdaq 100	17,338.84	0.0%
S&P 500	4,851.32	0.0%
Dow Jones	37,831.33	-0.4%
Russell 2000	1971.67	-0.7%

The SPDR S&P 500 ETF Trust SPY held steady at $483.31, the SPDR Dow Jones Industrial Average DIA fell 0.5% to $378.22 and the tech-heavy Invesco QQQ Trust QQQ was unchanged at $421.69, according to Benzinga Pro data.

Sector-wise, the Consumer Staples Select Sector Fund XLP outperformed, up 0.9%. The Real Estate Select Sector Fund XLRE fell the most, down 0.7%.

Tuesday’s Stock Movers

• Shares of United Airlines Holdings Inc. UAL rose more than 6% after the company’s strong earnings and revenue results last quarter. The airline released weak guidance for the first quarter after the Boeing 737 Max groundings.
• Other companies reacting to earnings were Verizon Communication Inc. VZ, up 5.4%, and Procter & Gamble PG up 4.4% after earnings and revenue topped estimates.
• 3M Company MMM sank more than 11% after the company’s full-year outlook disappointed. General Electric GE fell nearly 1% after disclosing weaker-than-expected guidance.
• Johnson & Johnson JNJ fell 1.5% despite an earnings and revenue beat, while Lockheed Martin Corp. LMT fell over 4% as the company’s CEO announced that profits from F-35 sales could weaken into the third quarter amid global supply chain disruptions.
• Netflix Inc. NFLX was flat ahead of its earnings release, scheduled after market close. The streaming giant secured WWE rights from January 2025, striking a $5-billion agreement with TKO Group Holdings Inc. TKO, which rose 13%.
• Texas Instruments TXN and Intuitive Surgical ISRG will also report after the closing bell.

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