U.S. stocks wilted Tuesday morning after back-to-back gains as investors evaluated another round of quarterly financial results from companies.
The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) each barreled down roughly 0.5% at the open, while the technology-heavy Nasdaq Composite (^IXIC) was off by 0.4%.
Among specific names in focus early Tuesday, General Electric’s (GE) stock fell 2% after reporting a fourth-quarter profit that was weighed down by its renewable energy business, even as the industrials company delivered an upbeat profit forecast, citing strong demand for its jet engines and power equipment.
Johnson & Johnson (JNJ) shares rose 1.4% after the healthcare giant reported full-year guidance above expectations despite the company’s chief executive officer warning earlier this year that the macroeconomic outlook is uncertain.
Shares of 3M Company (MMM) tumbled 5.5% after the manufacturing conglomerate reported a lower profit over an inflation-related drop in demand for items including air purifiers and respirators, while announcing it would cut 2,500 jobs.
Microsoft Corporation (MSFT) is scheduled to report its results after the closing bell.
In other pockets of the market, the U.S. dollar steadied after falling to the lowest in nine months across recent days, while in commodities, oil futures inched higher. West Texas Intermediate (WTI) oil — the U.S. benchmark — traded near $82 per barrel.
The earnings season has been off to a milder start. The fourth-quarter net profit margin for the S&P 500 so far is 11.4%, below the previous quarter’s net profit margin of 11.9% and below the year-ago net profit margin of 12.4%, according to FactSet data. Moreover, consensus earnings estimates for 2023 have steadily trended lower.
On the economic front, Thursday’s gross domestic product (GDP) reading is the highlight of the week. However, investors remain squarely focused on the Federal Reserve’s next rate announcement at the start of February, with officials expected to downshift to a smaller hike.
The CME FedWatch Tool, which serves as a barometer for imminent Fed rate and U.S. monetary policy, shows markets were pricing in a 99.1% chance of a 25-basis point hike as of Tuesday morning.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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