U.S. stock indexes are drifting as earnings reports from major players like Morgan Stanley and UnitedHealth come in mixed. Economic data’s tug-of-war keeps traders on edge, with Treasury yields holding steady and markets recalibrating expectations for 2025.
Mixed Earnings and a Slowing Momentum
U.S. stock indexes were all over the place on Thursday, as earnings from heavyweights like Morgan Stanley and UnitedHealth Group painted a mixed picture. The S&P 500 nudged up 0.1%, while the Dow Jones slipped 43 points, and the Nasdaq dropped slightly. Traders were trying to make sense of conflicting reports—some good, some less-than-stellar—that have left markets in limbo. Some investors felt optimistic amid strong results by Morgan Stanley and a slew of banks, but UnitedHealth's dip and below-forecast retail sales data capped things from becoming too exciting. Wall Street appears to be cruise control for the time being--no big leaps and no dramatic plunges.
Economic Data Keeps the Fed Guessing
Economic reports continue to play the role of market rollercoaster, keeping Wall Street on edge. Mixed signals emerged on Thursday, as retail sales underperformed expectations, while unemployment filings rose and manufacturing in the mid-Atlantic bounced back. What does this mean? It’s hard to say. The economy’s not exactly heading for a recession, but it may be slowing enough to keep inflation in check—at least for now. This uncertainty has traders rethinking their bets on the Federal Reserve's next move. Will they cut rates or hold steady? With Treasury yields calm for the moment, it’s a waiting game. Economists’ predictions are swirling as investors try to get ahead of the next rate hike or cut.
A Bank and Health Insurance Rollercoaster
Banks and insurers are pulling stocks in opposite directions. Morgan Stanley soared 2.4% after delivering a strong earnings report, with investment banking and financial markets working in its favor. Meanwhile, UnitedHealth Group slipped 4.9%, despite a profit beat. The company’s surprise surge in medical costs and weaker-than-expected revenue left Wall Street scratching its head. It didn’t help that this report came on the heels of CEO Brian Thompson’s tragic death, which had already spooked investors. While Morgan Stanley's stock danced to the tune of better-than-expected results, UnitedHealth’s report felt more like a misstep.
Global Markets Are Looking Up
While U.S. stocks waver, global markets are holding steady, with European and Asian indexes showing notable gains. France’s CAC 40 leapt 1.8%, South Korea’s Kospi gained 1.2%, and Hong Kong’s Hang Seng rose 1.2%. It’s a reminder that investors abroad are feeling more optimistic than those stateside—at least for now. Taiwan Semiconductor’s 57% profit surge, driven by the AI boom, gave a nice jolt to global stock markets, with its U.S. shares rising by 5.2%. The boost from Taiwan Semiconductor even lifted related stocks like KLA and Lam Research, showing that global growth in the tech sector is still running strong—at least on this side of the world.
Steady Yields, But Not Much Else
Treasury yields were fairly calm, with the 10-year Treasury yield easing slightly to 4.62% from 4.66%. The two-year yield dipped too, following expectations that the Fed may hold back on aggressive rate hikes for the time being. While Treasury yields haven’t been this high since last fall, they’re not spiking dramatically—leaving stock prices relatively unaffected. However, if yields were to continue creeping upward, it could put the squeeze on stocks, especially if companies don’t deliver stronger-than-expected profits. For now, markets seem to be holding their breath, with the fate of both bonds and stocks tied to the same uncertain economic forecasts.
