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Wall Street Slightly Lower as Market Awaits Earnings and Fed Insights

Wall Street experienced a minor dip as investors eagerly await corporate earnings reports and Federal Reserve insights on the future of interest rates.

Wall Street sign
Wall Street sign

Major U.S. stock indexes experienced a slight decline on Monday as higher bond yields put pressure on tech and growth stocks. Investors are anticipating a week filled with corporate results and remarks from Federal Reserve officials, which could offer more insight into the future direction of interest rates.

Gauging Corporate Profits and Economic Health with Q1 Reports

The market is currently evaluating the state of corporate profits and the economy following strong first-quarter reports from several banks last week. This week, more reports from major U.S. banks, such as Goldman Sachs Group Inc, Bank of America Corp, and Morgan Stanley, are expected.

NY Fed Manufacturing Activity Barometer Rises, Supporting Rate Hike

On Monday, the New York Fed announced that its manufacturing activity barometer for New York State increased for the first time in five months in April. This development strengthens the case for the U.S. central bank to raise interest rates during its meeting next month.

Market in "Wait-and-See Mode" as Corporate Earnings and Fed Decision Loom

Angelo Kourkafas, an investment strategist at Edward Jones, stated that the market is currently in a "wait-and-see mode," as investors anticipate upcoming corporate earnings and the Fed rate decision in the coming weeks.

Monitors showing the Nasdaq logo and stock markets
Monitors showing the Nasdaq logo and stock markets

Tech and Growth Stocks Struggle as Major Indexes Fall

The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all experienced losses, with tech and growth stocks feeling the pressure from higher bond yields. Alphabet Inc, Google's parent company, saw its shares fall 3% following news that Samsung Electronics may replace Google with Microsoft-owned Bing as the default search engine on its devices.

S&P 500 Earnings Expected to Decline, Investors Seek Executive Outlooks

According to Refinitiv IBES data, S&P 500 company earnings are predicted to have dropped 4.8% in the first quarter compared to the same period last year. Investors are also interested in hearing outlooks from executives following a banking crisis last month that could potentially speed up an economic downturn.

US Treasury Yields Rise, Fed Rate Hike Likely Next Month

U.S. Treasury yields increased on Monday, with several Fed speakers scheduled to speak later in the week. The U.S. central bank is widely expected to raise rates by 25 basis points to the 5%-5.25% range next month.