The U.S. stock market continued its upward trajectory on Tuesday, reaching unprecedented levels for the third consecutive day. The S&P 500 edged higher by 0.2%, while the Dow Jones Industrial Average increased by 161 points, or 0.3%. The Nasdaq composite saw the most significant gain, climbing 0.8%.
Investor sentiment remained cautious as Wall Street awaited key events that could influence the market, including an announcement from the Federal Reserve regarding interest rates and forthcoming earnings reports from major corporations. On the international front, President Donald Trump is set to meet with China’s Xi Jinping on Thursday, aimed at easing tensions between the two economic giants.
Profit reports emerging from overnight trading served as the key drivers of the day’s market movements. United Parcel Service (UPS) surged by 8% after posting stronger-than-expected earnings and forecasting a promising holiday shipping season. PayPal saw a 3.9% increase after also surpassing profit predictions and announcing plans for quarterly dividends, along with a partnership allowing users to pay via OpenAI’s ChatGPT.
Another notable mover was Skyworks Solutions, which soared 5.8% on the news of its merger with Qorvo in a cash-and-stock transaction valued at $22 billion, granting Skyworks shareholders approximately 63% ownership of the new entity. Microsoft also contributed positively to the market, rising 2% and pushing its valuation beyond $4 trillion.
Conversely, Royal Caribbean experienced an 8.5% decline despite reporting a stronger profit than anticipated, as revenues fell short of expectations due to adverse weather conditions and the temporary closure of one of its destinations. Homebuilder D.R. Horton dropped 3.2% following lower-than-expected summer profits. The company’s Executive Chairman David Auld noted the continued challenges homebuyers face in an affordability crisis and the need for incentives to attract potential buyers in the upcoming fiscal year.
Amazon saw a modest gain of 1%, announcing approximately 14,000 job cuts—about 4% of its corporate workforce—as it shifts towards investing in artificial intelligence while reining in costs.
A key factor influencing market expectations is the anticipated job market slowdown, prompting speculation that the Federal Reserve may lower interest rates. This would mark the second rate cut of the year, with many analysts forecasting a further reduction in December, contingent on inflation trends.
In bond markets, the yield on the 10-year Treasury fell slightly to 3.97% from 4.01% recorded late Monday. Meanwhile, consumer confidence appeared to be slightly better than economists had predicted, but the overall impact on the market was minimal.
Closing figures reflected the optimistic trend, with the S&P 500 finishing up 15.73 points at 6,890.89, the Dow Jones Industrial Average rising by 161.78 to 47,706.37, and the Nasdaq composite advancing by 190.04 to reach 23,827.49.
While stock markets reflected varied performances abroad, U.S. stocks remained buoyed by strong corporate earnings and anticipation of favorable economic policies. As financial markets remain reactive to global trends, the outlook for investors appears cautiously optimistic amid ongoing developments.