US STOCKS-Wall St mixed with focus on earnings, rate-cut expectations

Wall Street's main indexes were mixed in choppy trading on Tuesday as investors scrutinized big-ticket earnings and awaited commentary from policymakers for clues on the timing of the Federal Reserve's first interest-rate cut. GE HealthCare Technologies gained 11.7% after the medtech firm posted better-than-expected fourth-quarter earnings, driving the S&P 500 healthcare sector up by 0.4%, to an all-time high.

Wall Street's main indexes were mixed in choppy trading on Tuesday as investors scrutinized big-ticket earnings and awaited commentary from policymakers for clues on the timing of the Federal Reserve's first interest-rate cut.

GE HealthCare Technologies gained 11.7% after the medtech firm posted better-than-expected fourth-quarter earnings, driving the S&P 500 healthcare sector up by 0.4%, to an all-time high. However, Eli Lilly reversed earlier gains and lost 1.0%, even after forecasting 2024 profit above estimates.

The materials index gained 1.6%, as chemicals firm DuPont de Nemours jumped 6.7% after beating fourth-quarter profit estimates, announcing a new $1 billion share-repurchase program and hiking its dividend. With over half of the S&P 500 companies now having reported earnings, 81.2% surpassed expectations, according to LSEG data. Overall S&P 500 earnings are expected to have risen 8.1% in the fourth quarter from the year-ago quarter.

Investors are monitoring forecasts from businesses against a backdrop of high borrowing costs and persistent slowdown concerns. "Investors have been expecting that 2024 will be a positive year for the stock market in general, and if you're expecting rate cuts, it ought to be," said Russell Hackmann, founder of Hackmann Wealth Partners.

"But there's a lot of risk out there, both geopolitical and in terms of what the Fed's going to do." Wall Street started the week on a glum note in the previous session on the heels of a blistering rally in the S&P 500, which notched 13 weekly gains out of 14. The benchmark index was aided by largely positive corporate earnings and optimism that a rate cut might be imminent.

However, Fed officials, including Chair Jerome Powell, have actively talked down market expectations of a quick start to policy easing, a key theme in the central bank's interest-rate decision last week. Strong labor market and economic activity data have also fed into rate-cut anxieties. Remarks from the Federal Reserve's policymakers through the day rank high on investors' watch list.

Traders are betting on a nearly 65% chance that at least a 25-basis-point rate cut could be delivered in May, with the odds standing at around 94% for the first cut in June, according to the CME FedWatch Tool. At 11:49 a.m. ET, the Dow Jones Industrial Average was up 51.71 points, or 0.13%, at 38,431.83, the S&P 500 was down 2.89 points, or 0.06%, at 4,939.92, and the Nasdaq Composite was down 43.24 points, or 0.28%, at 15,554.44.

Weighing on the tech-heavy Nasdaq, chip stocks Nvidia and Broadcom fell over 2%, sending the Philadelphia SE Semiconductor index down 1.9%. The KBW Regional Banking index dropped 0.8% as New York Community Bancorp plummeted 15.3%, stretching a selloff since the lender reported a surprise quarterly loss last week.

Airline stocks jumped after Frontier Group Holdings' surprise break-even earnings, aiding a 2.4% advance in the Dow Jones Transport Average. Palantir Technologies jumped 25% after forecasting upbeat annual profit.

Gartner lost 2.9% after the research and advisory firm forecast annual results below estimates. Advancing issues outnumbered decliners by a 2.81-to-1 ratio on the NYSE and a 1.90-to-1 ratio on the Nasdaq.

The S&P index recorded 22 new 52-week highs and eight new lows, while the Nasdaq recorded 60 new highs and 89 new lows.