Stocks rose higher on Tuesday, with the S&P 500 Index and Nasdaq Composite closing at fresh highs, as market participants looked ahead to Nvidia's earnings report due out Wednesday. The broader market index and tech-heavy indexes rose 0.25% and 0.22%, respectively, while the Dow Jones Industrial Average advanced over 65 points.
Here's how the market settled on Tuesday:
S&P 550 Index (NYSE: SPY): +0.25% or +13.28 points to 5,321.41
Dow Jones Industrial Average (NYSE: DIA): +0.17% or +66.22 points to 39,872.99
Nasdaq Composite Index (NASDAQ: QQQ): +0.22% or +37.75 points to 16,832.62
Zoom In:
Chief Investment Officer Americas for UBS Global Wealth Management Solita Marcelli wrote in a note on Tuesday that artificial intelligence names have more expected growth ahead as market participants anticipate Nvidia's (NASDAQ: NVDA) earnings report on Wednesday.
"The structural growth prospects of artificial intelligence remain appealing," Marcelli wrote. "We see strong earnings growth ahead for AI-related names and the broader global tech sector, forecasting earnings growth of 20% this year and 16% in 2025."
Zoom Out:
Federal Reserve Governor Christopher Waller said Tuesday that more inflation easing needs to be seen before policymakers will be confident to lower interest rates.
"The economy now seems to be evolving close to what the [Federal Open Market Committee] expected," Waller said in a speech in Washington. "In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy."
On the Earnings Front:
Lowe's (NYSE: LOW) topped expectations for its earnings and revenue on Tuesday, despite waning consumer sales. The home improvement retailer also maintained its full-year outlook, expecting total sales in a range of $84 billion and $85 billion, representing a decline from $86.38 billion in fiscal 2023. Lowe's also expects comparable sales to decline between 2% and 3% compared to the previous year, alongside earnings per share outlook between $12.00 and $12.30 for the year, down from last year's $13.20.
Macy's (NYSE: M) fiscal first-quarter earnings also beat expectations on Tuesday, as its revenue came in-line with analyst estimates in a sign that its turnaround strategy is working. The legacy department store also raised its full-year expectations, anticipating net sales of between $22.3 billion and $22.9 billion, comparable sales to range from a decline of about 1% to an increase of 1.5%, and adjusted earnings per share between $2.55 and $2.90.
During Macy's earnings call, CFO and COO Adrian Mitchell said the company assumes in its outlook that consumers "will remain under pressure for the balance of the year."
In the News:
Peloton Interactive (NASDAQ: PTON) shares were lower Tuesday after the company said it is launching a "global refinancing," in effort to support its business amid declining sales. The connected fitness company is offering $275 million in convertible senior notes due 2029 and entering into a new $100 million revolving credit facility.
For Wednesday:
Market participants will react to minutes from the central bank's May FOMC meeting, as well as earnings reports from Target (NYSE: TGT), Analog Devices (NASDAQ: ADI), PDD Holdings (NASDAQ: PDD) and TJX Companies (NYSE: TJX).