Key Takeaways
US stocks advanced Tuesday, with the tech-heavy Nasdaq setting a new all-time high, as investors appeared to prioritize a robust first-quarter corporate earnings season over rising geopolitical tensions in the Middle East.
"The market psychology and the market momentum are so positive right now that as long as the news isn't truly terrible, the stock market seems inclined to rally," Steve Sosnick of Interactive Brokers said.
The focus on domestic profits came despite a sharp drop in shares of HSBC, which fell 1.4% in London after the banking giant’s first-quarter earnings missed expectations. The bank booked a surprise $400 million fraud-related charge and warned of economic risks from the conflict between the US and Iran, which saw the two countries trade fire Monday in the Strait of Hormuz, shaking a fragile four-week ceasefire. Bond yields climbed on renewed inflation concerns after the Mideast flareup, according to a Bloomberg report.
Still, the bullish sentiment in the US was palpable as markets rebounded from Monday's losses. "US equities continue to get a boost from the first quarter earnings season," said Trade Nation analyst David Morrison, who noted the year-on-year earnings growth rate is over 27 percent. The advance was broad, though traders pointed to the pullback in oil prices as a supporting factor for the wider market. International benchmark Brent crude fell more than 3 percent to under $111 per barrel, a reversal from the prior day's surge. The question for investors is whether the optimism can last. "The longer the situation goes on without any sign of a lasting resolution, the harder it will be for investors to remain positive," said AJ Bell head of markets Dan Coatsworth.
This article is for informational purposes only and does not constitute investment advice.
