NEW YORK: US stocks traded flat on Tuesday as investors processed a recent bond market sell-off and geared up for a fresh round of earnings reports, reported Xinhua.
The Dow Jones Industrial Average fell by 6.71 points, or 0.02 per cent, to 42,924.89. The S&P 500 sank 2.78 points, or 0.05 per cent, to 5,851.2. The Nasdaq Composite Index increased by 33.12 points, or 0.18 per cent, to 18,573.13.
Six of the 11 primary S&P 500 sectors ended in red with industrials and materials leading the laggards by losing 1.19 per cent and 0.86 per cent, respectively. Meanwhile, consumer staples and communication services led the gainers by going up 0.92 per cent and 0.35 per cent, respectively.
US Treasury yields have surged over the past month, driven by stronger-than-expected economic data and concerns that inflation's decline toward the Federal Reserve's 2 per cent target may take longer than anticipated. The 10-year Treasury yield has risen nearly 50 basis points, reaching around 4.2 per cent, its highest since July.
This jump reflects growing uncertainty among investors, not so much about whether the Fed will cut rates again in November, but about the pace of rate cuts over the next year.
As of Tuesday, the CME FedWatch Tool showed an 88 per cent chance of a rate cut in November, but projections for future cuts have decreased. Markets now expect fewer rate reductions by the end of next year compared to previous forecasts in September and early October.
Goldman's forecast on Tuesday suggested that the S&P 500 is expected to underperform compared to US Treasury securities.
Specifically, there's a 72 per cent chance that the S&P will yield lower returns than Treasuries, and a 33 per cent chance it could generate returns that fail to keep pace with inflation through 2034. This outlook raises concerns for investors looking for growth, highlighting a potentially challenging environment for equity returns in the coming years.
On the earnings front, General Motors boosted its annual outlook for the third time this year, driven by strong electric vehicle sales, which contributed to its quarterly profit and revenue beat, sending GM shares up more than 9.8 per cent.
Meanwhile, GE Aerospace tumbled over 9 per cent and Verizon fell around 5 per cent after delivering mixed third-quarter results. Looking ahead, Tesla's earnings report on Wednesday is highly anticipated, as Wall Street debates whether the "Magnificent Seven" tech giants will continue to propel the market higher.