Wall Street Investors Hold Out for Earnings Growth and Rate Cuts Amid Chaotic Presidential Administration

Barry Adams
21 Jan, 2025
New York City

Wall Street indexes advanced in Tuesday's trading after investors returned from a three-day weekend, and bond yields edged lower. 

The S&P 500 index gained 0.2%, and the Nasdaq Composite jumped 0.4% as investors looked ahead to the release of key earnings this week and the Federal Reserve's rate decisions. 

The Federal Reserve is widely anticipated to hold rates steady at the end of a two-day meeting on January 28, but investors are still holding out for rate cuts totaling 100 basis points in 2025. 

Investors have raised expectations of earnings growth for the fourth quarter 2024 after retailers generally confirmed a strong holiday season and banks reported blowout earnings. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.3% to 6,018.25, the Nasdaq Composite rose 0.4% to 19,675.02, and the Russell 2000 index inched up by 0.1% to 2,286.32. 

The yield on 2-year Treasury notes edged higher to 4.27%, 10-year Treasury notes inched down to 4.57%, and 30-year Treasury bonds declined to 4.81%.

WTI crude oil decreased $0.90 to $75.55 a barrel, and natural gas prices edged down 2 cents to $3.79 a thermal unit.

Gold decreased by $17.81 to $2,727.41 an ounce, and silver rose by $0.02 to $30.58. 

The dollar index, which weighs the US currency against a basket of foreign currencies, increased by 0.09 to 109.05 and traded at a two-year high. 

 

U.S. Stock Movers 

D.R. Horton Inc. gained 3.9% to $153.35 in pre-market trading after the home builder posted a 1% decrease in revenue in the fiscal first quarter 2025 ending in December. 

Net income plunged 11% from a year ago to $844.9 million, and diluted earnings per share eased to $2.61 from $2.82 a year ago.

The company closed sales of 19,059 homes, while net sales orders amounted to 17,837 homes. 

D.R. Horton repurchased 6.8 million shares of common stock for $1.1 billion and paid cash dividends totaling $128.5 million.

The home builder declared a quarterly cash dividend of 40 cents per share payable on February 14 to shareholders on record February 7. 

Costco Wholesale Co edged up 0.1% to $944.50 after the membership warehouse club operator's workers' union of 18,000 workers voted to strike at the end of January if management fails to meet their demands. 

Costco recently reported $254 billion in annual revenue and $7.4 billion in net profits, which is a 135% increase since 2018.