US stocks slipped on Tuesday as investors digested a recent bond market sell-off and braced for the next wave of earnings reports.
The S&P 500 (^GSPC) dropped about 0.2%. Meanwhile, the Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite (^IXIC) were both off about 0.1%.
Stocks are coming under pressure amid growing doubts that the Federal Reserve will continue to cut rates aggressively — or even hold steady in November. Strength in the economy, cautious Fedspeak, and concerns about the fiscal impact of an election win by Republican nominee Donald Trump are factors in play.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Amid the uncertainty, the 10-year Treasury yield (^TNX) steadied around 4.2% after Monday's sharp gains helped push it above that level for the first time since July. The bond selling has weighed on rate-sensitive stocks such as real estate, with rising yields typically a catalyst for stock drawdowns.
On the earnings front, General Motors (GM) raised its guidance for the third time this year as upbeat EV sales helped deliver a quarterly profit and revenue beat. GM shares were up more than 9%. Elsewhere in earnings, GE Aerospace (GE) fell over 7% and Verizon shares fell around 5% on mixed third quarter reports.
At the same time, anticipation is building for earnings from Tesla (TSLA) on Wednesday as Wall Street debates whether the "Magnificent Seven" tech megacaps will lead stocks' next leg higher.
Despite higher yields, gold (GC=F) prices rose, on track to reclaim Monday's record high. The gains came as investors sought safety with the US presidential election looming and Middle East tensions still on the rise.
LIVE 6 updates Elections offer 'high' level of uncertainty to global economic outlook: IMF
Yahoo Finance's Jennifer Schonberger reports:
The International Monetary Fund said Tuesday that the global economy is on pace for a soft landing this year and 2025 but elections around the world introduce a "high" level of uncertainty to that outlook due to potential changes in trade and fiscal policy.
The IMF said an increase in global tariffs could exacerbate trade tensions, disrupt global supply chains, and weigh down medium-term growth prospects by limiting positive spillovers from innovation and technology transfer that once fueled growth in emerging markets and developing economies.
Read more here.
Markets are debating a higher for longer interest rate stance from the Fed
Treasury yields spiked over the last month amid a slew of stronger-than-expected economic data and signs that inflation's path down toward the Fed's 2% goal may take longer than initially hoped.
The data has pushed the 10-year Treasury yield (^TNX) up nearly 50 basis points in the past month to hover near 4.2%, its highest level since July. As our graph below shows, the debate among investors appears to be more about how quickly the Fed will reduce interest rates over the next year than whether the central bank will cut once again in November.
As of Tuesday morning, markets were still pricing in a roughly 88% chance that the Fed cuts rates at its November meeting, per the CME FedWatch Tool. But by the end of next year, markets see the Fed likely making one less cut than was priced in on Oct. 4 and two less cuts than markets were projecting on Sept. 18, the day the Fed slashed rates by half a percentage point.
General Motors raises profit forecast, shares soar
General Motors (GM) stock rose more than 7% on Tuesday morning as the automaker boosted its profitability guidance for a third time this year.
Yahoo Finance's Pras Subramanian reports:
For the quarter, GM reported revenue of $48.78 billion, easily topping estimates of $44.69 billion per Bloomberg consensus, and higher than the prior quarter's nearly $48 billion. GM's Q3 revenue was also 10.5% higher than a year ago.
The company booked adjusted earnings per share of $2.96, far outstripping expectations of $2.44. It reported EBIT-adjusted profit of $4.115 billion, up 15.5% from a year ago, with EBIT-adjusted margin climbing to 8.4% from 8.1% year over year.
Read more here.
Stocks slide at the open
US stocks retreated on Tuesday as investors digested a recent bond market sell-off and braced for the next wave of earnings reports.
The S&P 500 (^GSPC) dropped more than 0.5%. The Dow Jones Industrial Average (^DJI) dropped more than 120 points, or 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) slid roughly 0.6%.
Companies reporting earnings Tuesday morning
A host of companies reported third quarter earnings Tuesday morning.
The biggest premarket stock movers were GE Aerospace (GE), Verizon (VZ), 3M (MMM), and Philip Morris (PM). GE Aerospace stock fell over 5% and Verizon shares fell around 3% on mixed third quarter reports. Paint company Sherwin Williams (SHW) fell 4% after an earnings miss. Lockheed Martin (LMT) and Moody’s (MCO) fell less than 1% despite strong results.
Meanwhile, Philip Morris jumped 3% after raising its guidance thanks to higher cigarette prices as well as its surging smoke-free business. General Motors (GM) rose 1.4% and tech and manufacturing conglomerate 3M jumped 6% after earnings beats.
Here are more details about the companies’ performances (expectations according to Bloomberg consensus estimates):
Good morning. Here's what's happening today.
Economic data: Philadelphia Fed Non-Manufacturing Index (October); Richmond Fed Manufacturing & Business Conditions Index (October)
Earnings: General Motors (GM), 3M Company (MMM), RTX Corporation (RTX), Verizon Communications (VZ), GE Aerospace (GE), Lockheed Martin (LMT), Quest Diagnostics (DGX), Philip Morris (PM), Denny's Corporation (DENN), Sherwin-Williams (SHW), Interpublic Group of Companies (IPG), Norfolk Southern Corporation (NSC), Texas Instruments (TXN), PulteGroup (PHM), Enphase Energy (ENPH)
Here are some of the biggest stories you may have missed overnight and early this morning:
GM posts Q3 earnings beat, raises profit forecast again
Nvidia plans to invest in Thailand as SE Asia becomes AI hub
ASML: Growth in 2026, US-China tensions to persist
Bullish Citi hikes 3-month gold price outlook to $2,800
Trump tariffs: How big business could escape 'blanket' duties
