Dow Jones rises amid corporate earnings and Fed rate cut outlook

The Dow Jones Industrial Average climbed on Tuesday as Wall Street assessed the latest batch of corporate earnings and the timeline for rates cuts from the Federal Reserve.

The S&P 500 closed up 0.23% at 4,954.23, while the Nasdaq Composite finished up 0.07% to close at 15,609.00. The Dow Jones Industrial Average jumped 141.24 points, or 0.37%, to end at 38,521.36.

Palantir Technologies surged 19% after the company posted a revenue beat in the fourth quarter, while Spotify Technology popped more than 6% after topping expectations and posting an increase in Premium subscribers.

Shifting to US sectors, Materials and Healthcare were the best performing sectors closing up 1.7 and 1.49% respectively . Tech was the worst performing sector closing down 0.48%.

Tuesday marks around the halfway point of the earnings season, with reports from Amgen, Chipotle Mexican Grill and Ford after the bell. After the bell Chipotle Mexican Grill posted quarterly earnings and revenue that beat analysts’ expectations as more customers visited its restaurants. Shares of the company rose more than 1% in extended trading.

Markets struggled during Monday’s session after Federal Reserve Chair Jerome Powell reaffirmed that a rate cut at the central bank’s March meeting is unlikely, and as bond yields rose.

The expectation for fast-approaching cut, combined with strong earnings from the technology behemoths, have contributed to the market’s push higher in recent weeks. This narrow market leadership, however, has heightened concerns over whether the market can sustain the rally without broader participation.

In other news, the sale of $54 billion worth of three-year US notes boosted overall sentiment, and the US government plans to sell $42 billion of 10-year Treasuries. Loretta Mester, President of the Federal Reserve Bank of Cleveland, expressed optimism about inflation but cautioned against assuming a rapid pace of disinflation, echoing Jerome Powell's comments.

In commodity-related news, China's leading industry association has proposed measures to address copper oversupply amid falling profits, while global mine curtailments have led to a significant decline in processing fees. Market analysts suggest that the Panama shutdown has induced market panic, leading to supply hoarding, and ANZ Banking Group anticipates a potential 4% increase in refined copper prices to reach $8,800 per ton by the quarter's end due to growing supply risks.

Futures

The SPI futures are pointing to a 0.7 per cent gain.

Currency

One Australian dollar at 9.00am was buying 65.24 US cents.

Commodities

Gold added 0.43 per cent. Silver gained 0.33 per cent. Copper added 0.30 per cent. Oil gained 0.99 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.90 per cent, Frankfurt gained 0.76 per cent, and Paris closed 0.65 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 0.53 per cent, Hong Kong’s Hang Seng gained 4.04 per cent and China’s Shanghai Composite fell 3.23 per cent higher.

Yesterday, the Australian share market closed 0.58 per cent lower at 7,581.58.

Ex-dividends

Flagship Investments (ASX:FSI) is paying 4.9 cents fully franked
ResMed Inc (ASX:RMD) is paying 5.1103 cents unfranked

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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