Dani Romero·ReporterJanuary 31, 2023, 1:09 PM·5 min readU.S. stocks rose Tuesday, closing out a strong January amid a continued flurry of corporate earnings and the start of the Federal Reserve's latest policy meeting.
The S&P 500 (^GSPC) rose 1.5%, as it gained over 5% for the month. The Dow Jones Industrial Average (^DJI) moved up 1.1%. The technology-heavy Nasdaq Composite (^IXIC) added roughly 1.7%, ending the month with an 11% gain. It marked the Nasdaq's best month since July and best January since 2001.
The yield on the benchmark 10-year U.S. Treasury note ticked down to 3.511% from 3.546% on Monday. The dollar index ticked down 0.21% to $102.06.
The major U.S. stock averages rebounded after tumbling on Monday, kicking off a week packed with macro events and major tech earnings.
The biggest item on the macroeconomic calendar is the FOMC’s policy meeting, which commenced on Tuesday ahead of an anticipated Wednesday decision to hike rates by quarter percentage point, bringing the federal funds to a target range of 4.5% to 4.75%. Yet It's unclear what could come next.
“[We] expect Powell to be quite hawkish in the press conference,” Michael Feroli, chief U.S. economist at JP Morgan, wrote in a note. “We look for him to stress two themes: (i) slowing is not stopping, and (ii) don’t expect rate cuts in ’23.”
It's also a significant week for the European Central Bank and the Bank of England, as it’s widely expected for officials to raise benchmark interest rates by 50 basis points on Thursday. Such a move would mark a slowdown from last year’s aggressive hikes, as inflation cools and unemployment levels remain low.
Elsewhere on the economic data front, consumer confidence fell to 107.1 compared to 109.0 in the prior month but remains above July 2022 levels, according to The Conference Board. Economists surveyed by Bloomberg forecasted a range of 105.0 to 112.5.
The busiest week of the fourth-quarter earnings season kicked off, with more than 100 companies representing nearly one-third of the S&P 500's market value reporting results.
Exxon Mobil (XOM) shares rose more than 2% Tuesday after the company reported earnings that beat expectations in the fourth quarter, while revenue came in short. The oil giant posted adjusted quarterly earnings per share of $3.40 compared to analyst forecasts of $3.29. Revenue in the quarter was $95.43 billion, lower than expectations of $97.3 billion.
McDonald’s (MCD) shares dipped after the company reported fourth-quarter earnings Tuesday morning that beat expectations as more customers visited the fast-food chain amid higher menu prices. Revenue for the quarter came in at $5.93 billion compared to $5.75 billion expected, while the company posted adjusted earnings per share of $2.59 compared to analysts forecasts of $2.44.
General Motors (GM) shares rallied Tuesday, gaining more than 8%. The car maker reported a 15% rise in net income in the fourth quarter amid weak consumer spending.
United Parcel Service (UPS) posted a decline in revenue for the fourth quarter as the company delivered fewer items during the holiday season. Revenue for the quarter fell 2.7% to $27.0 billion, missing analyst expectations of $28.09 billion. UPS reported an adjusted profit of $3.62 per share for the quarter ended Dec. 31, higher than expectations of $3.59 per share.
Caterpillar Inc. (CAT) posted lower-than-expected quarterly profit, the first time since the start of the pandemic. Caterpillar reported Tuesday adjusted fourth-quarter earnings of $3.86 a share, while analysts expected $3.97.
Spotify (SPOT) reported fourth-quarter results that gave investors a mixed outlook ahead, as the company delivered a wider-than-expected loss and a beat on gross margins. Revenue for the fourth quarter missed. Meanwhile, total monthly active users surpassed expectations, coming in at 489 million compared to 478 million expected.
Finally, Pfizer (PFE) shares dipped, then rebounded after the pharma giant reported adjusted earnings of $1.14 per share on $24.29 billion in sales. The company said it expects lower sales in 2023, including a steep fall in sales for its COVID vaccine.
Elsewhere in markets, shares of Carvana (CVNA) surged on Monday by as much as 33% and rose again in Tuesday trading. According to Bespoke Investments data, Carvana is part of the list of the 35 most heavily shorted stocks in the Russell 1,000 at the moment. These stocks on average are up 18.8% this year.
Meanwhile, things will quickly turn to tech after the bell. Snap (SNAP) is set to provide an early look into what is cooking in the world of online advertising, user growth and consumer spending, following Microsoft (MSFT) signaling a continued slowdown in cloud growth in December.
Meta Platforms (META) is set to report quarterly results Wednesday, while Amazon (AMZN), Apple (AAPL), Alphabet (GOOG) are gearing up for Thursday.
Overseas, the International Monetary Fund said on Monday that it expects the global economy to slow. In the U.S., economic growth will slow to 1.4% this year as central banks continue to work to tame inflation, the IMF said.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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