“We’re in a pretty good place,” Powell said about where the economy and interest rates are. He said again he’s aware that going too slowly on rate cuts could damage the economy, while moving too quickly could fan inflation higher.
Higher rates tend to put downward pressure on prices for stocks and other investments, while tapping the brake on the economy by making borrowing more expensive. That could be risky for a US stock market that critics say already looks too expensive.
Powell said the US economy is in a “pretty good place” in testimony before the Senate. Credit: Bloomberg
One way companies can offset such downward pressure is to deliver stronger profits. And big US companies have mostly been doing so this earnings reporting season, as they show how much profit they made during the last three months of 2024. That, though, hasn’t always been enough.
Marriott International fell 4.7 per cent even though it reported a better profit for the latest quarter than analysts expected. Investors focused instead on its forecasted range for an important underlying measure of profit this upcoming year, which fell short of what analysts were expecting.
Helping to offset such losses was DuPont, which climbed 7.2 per cent after the chemical company reported better profit than Wall Street expected. The Delaware company said its results were helped by strong demand in its electronics business, which it is spinning off later this year.
Coca-Cola rose 3.2 per cent after reporting stronger profit and revenue than analysts expected. Growth in China, Brazil and the United States helped lead the way.
In the bond market, the yield on the 10-year Treasury rose to 4.52 per cent from 4.50 per cent late Monday. The two-year Treasury yield, which moves more closely with expectations for upcoming action by the Fed, held steady. It remained at 4.28 per cent, where it was late Monday.
In stock markets abroad, indexes were mixed across Europe and Asia. Hong Kong’s Hang Seng fell 1.1 per cent, and South Korea’s Kospi rose 0.7 per cent for some of the bigger moves, while Japanese markets were closed for a national holiday.
Trump has pressed ahead with 10 per cent tariffs on Chinese goods, while China has retaliated by imposing tariffs on US coal and liquefied natural gas products as well as crude oil, agricultural machinery and large-engine cars.
Loading
“Beijing’s restraint in targeting only a small sliver of US goods is deemed to be a deliberately less than proportionate response to avert an escalatory tit-for-tat spiral,” said Vishnu Varathan, head of macro research at Mizuho.
“Nonetheless, the reality is that US-China trade tensions are set to structurally ramp-up, even if a negotiated compromise is the endgame for Trump 2.0 tariffs,” Varathan added.
AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
