The primary indexes on Wall Street paused on Thursday following a spike in the prior session, driven by strong earnings reports from leading banks, as investors looked over data to evaluate the likelihood of interest rate reductions this year.
By 11:59 a.m. ET, the Dow Jones Industrial Average increased by 26.22 points, or 0.06%, reaching 43,247.77. The S&P 500 climbed 5.34 points, or 0.09%, to 5,955.25, whereas the Nasdaq Composite fell by 53.30 points, or 0.27%, down to 19,457.93.
Morgan Stanley’s shares rose by 3.3% after the bank reported a rise in earnings for the fourth quarter, spurred by a surge in deal activity, while Bank of America dipped by 1.2%. The nation’s second-largest lender anticipated increased interest income by 2025.
Investors were also attentive to remarks from Fed Governor Christopher Waller, who indicated that if economic data continues to weaken, three or four interest cuts this year remain feasible.
The yield on the 10-year Treasury note decreased to 4.617%, with futures markets adjusting to reflect around 43.5 basis points of anticipated rate cuts in 2025 following Waller’s comments, compared to about 37 bps late Wednesday, based on LSEG data.
“Anyone attempting to forecast our position amidst the uncertainties of the new administration and especially the implications of tariffs is making a mistake,” stated Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
“Currently, it’s essential to recognize that inflation has proven more persistent than we anticipated, alongside a landscape of political uncertainty.”
President-elect Donald Trump is slated to assume office on Monday.
Among the 11 S&P 500 sectors, seven advanced, with both utilities and real estate stocks rising over 1.5% each.
The S&P 500 equally weighted index rose by 0.7%, while technology giants Apple and Nvidia put pressure on the Nasdaq.
On the economic front, reports indicated that retail sales for December grew less than forecasted, while another report noted that weekly jobless claims increased more than expected.
On Wednesday, Wall Street’s main indexes experienced their largest single-day rise since November 6, following data that suggested underlying inflation was easing and strong earnings from three of the largest banks.
The S&P 500 banks index and the regional banks index have outperformed the major Wall Street indexes thus far in January, as investors foresee a promising business environment for the sector under Trump. This sentiment was echoed by bank CEOs on Wednesday.
Of the 28 S&P 500 companies that had disclosed fourth-quarter earnings by Wednesday, 82.1% exceeded expectations, according to data from LSEG.
UnitedHealth experienced a 4.5% decline after reporting fourth-quarter revenue that fell short of estimates.
Shares of Taiwan Semiconductor Manufacturing Co listed in the U.S. increased by 4.8% following the company’s announcement of record quarterly profits.
During a Senate confirmation hearing, Treasury nominee Scott Bessent expressed support for extending Trump’s 2017 tax cuts.
Advancing stocks outnumbered decliners by a ratio of 1.81-to-1 on the NYSE and 1.08-to-1 on the Nasdaq.
The S&P 500 saw 19 new 52-week highs and nine new lows, while the Nasdaq Composite recorded 50 new highs and 84 new lows.
