On the evening of the 30th, Beijing time, U.S. stocks continued to slide in early trading on Tuesday, with the Dow falling more than 200 points. The Federal Reserve will hold a monetary policy meeting starting today, with the results of the meeting being announced on Wednesday. This week, the market will also focus on more corporate earnings and April non-farm payrolls.
The Dow fell 210.95 points, or 0.55 percent, to 38,175.14, the Nasdaq lost 25.23 points, or 0.16 percent, to 15,957.85 and the S&P 500 lost 9.75 points, or 0.19 percent, to 5,106.42.
U.S. stocks closed higher on Monday. Tesla surged more than 15 percent, adding more than $80 billion to its market capitalization after the electric car maker reached a key milestone in the rollout of advanced driver assistance technology in China. Apple's stock was bullish by brokerage Bernstein, whose shares rose 2.5%.
Even so, the three major U.S. stock indexes will still record losses in April, as market expectations for the Federal Reserve to cut interest rates this year have fallen sharply from the beginning of the year. So far in April, the Dow has fallen more than 3%, and the S&P 500 and Nasdaq have both fallen more than 2%. This comes after all three major stock indexes recorded five consecutive months of gains.
Dan Greenhaus, chief strategist at Solus Alternative Asset Management, said: "If you look at the size and scope of the rebound in US equities from the October lows, and then you think about the stickiness of inflation, I wouldn't be surprised to see some restraints in the market for a while. ”
The Federal Reserve will hold a two-day monetary policy meeting starting on Tuesday and will announce the results on Wednesday. Fed Chair Jerome Powell will hold a press conference after announcing the policy meeting decision.
Traders are worried that Powell's post-meeting comments will be more hawkish after the recent flurry of economic data showing hot inflation.
Given the recent release of a series of economic data showing persistently high inflation in the United States and a resilient economy, the market predicts that the Fed is more likely to keep interest rates high for longer.
Michael Gapen, an economist at BofA U.S., said ahead of the Fed's interest rate decision that the unexpectedly stubborn U.S. inflation left the Fed not confident enough to consider cutting interest rates, causing interest rates to remain high for longer.
In response to higher-than-expected inflation data, BofA has revised its forecasts sharply over the past month. After initially predicting three rate cuts this year, the bank now expects the Fed to cut rates only once this year in December.
The Fed is now expected to cut rates only once by a quarter percentage point in 2024, compared to six to seven rate cuts by a quarter percentage point each.
Looking ahead, BofA does not rule out another Fed rate hike, but only if one of two scenarios occurs: an acceleration in core and headline inflation, or an increase in inflation expectations. Both scenarios indicate that the supply shock is over and the economy may be overheating, Gapen said.
The U.S. stock earnings report enters the busiest week, with Amazon and Apple reporting quarterly results on Tuesday and Thursday, respectively.
In the already announced earnings report, McDonald's sales failed to meet expectations. Coca-Cola beat expectations and raised its guidance.
On the data front, investors will have their April non-farm payrolls report on Friday, while job openings and private sector job growth data will be released on Wednesday.
Stocks in focus
Tesla CEO Elon Musk is reported to have fired two more Tesla executives and plans to lay off hundreds more people. In an email sent to Tesla executives late on April 29 local time, Musk said that Rebecca Tinucci, a senior director of the company's charging station division, and Daniel Ho, head of new products, will leave on the morning of April 30. Tesla's public policy team, led by former executive Rohan Patel, will also be disbanded.
It is also reported that the U.S. Supreme Court rejected Musk's appeal over a settlement agreement with the U.S. Securities and Exchange Commission (SEC) that requires Musk to obtain approval before publicly commenting on Tesla.
In September 2018, the SEC filed a lawsuit against Musk, alleging that Musk's privatization of Tesla in August of that year was alleged to be securities fraud and misleading investors. Musk paid a $20 million fine in September 2018 and agreed to step down as chairman of Tesla.
Microsoft announced on Tuesday that it would invest $1.7 billion over the next four years in Indonesia to build cloud computing and artificial intelligence infrastructure, betting on growth in Southeast Asia's largest economy.
Microsoft CEO Satya Nadella announced the investment plan on Tuesday after meeting with Indonesian President Joko Widodo. The company has also pledged to help train 2.5 million people in Southeast Asia in AI skills, including 840,000 in Indonesia.
Apple has reportedly poached dozens of AI experts from Google and created a "secret lab" in Zurich to house a new team of employees tasked with building new AI models and products. Apple is assembling a team to compete with competitors in developing new AI models and products. Based on an analysis of hundreds of LinkedIn profiles, as well as open recruitment and research papers, Apple has gone on a hiring spree in recent years to expand its global AI and machine learning teams.
The European Commission said on Tuesday that it was investigating Meta's possible violations of the Digital Services Act, citing the company's failure to remove "deceptive advertising and disinformation" from Facebook and Instagram. The European Commission found that Meta failed to comply with its obligations under the DSA "in connection with addressing the dissemination of deceptive advertising, disinformation campaigns and coordinated inauthentic behaviour in the EU". If Meta is found to have violated the law, it could be fined up to 6% of its annual global turnover.
The investigation will also focus on political content, as well as the lack of "effective" third-party real-time monitoring tools ahead of the upcoming European Parliament elections and other EU elections.
McDonald's first-quarter results were worse than expected due to the slowdown in the U.S. market and the Palestinian-Israeli conflict. The company's first-quarter revenue was $6.17 billion, up 4.6% year-over-year, in line with market expectations. Non-GAAP earnings per share were $2.7, slightly below consensus. Same-store sales, a measure that tracks restaurants that have been open for more than a year, rose 1.9 percent, below analysts' expectations of 2.3 percent.
Coca-Cola's first-quarter revenue and EPS exceeded expectations, and the full-year revenue guidance was raised. The company's first-quarter revenue was $11.3 billion, up 3% year-over-year, beating the consensus of $10.3 billion: EPS of $0.72, beating the consensus of $0.65. Organic revenue increased by 11% year-on-year, higher than market expectations. The company expects endogenous revenue growth of 9% in 2024, higher than the previous forecast of 6%-7% and also higher than market expectations.
Automaker Stellantis' first-quarter net revenue fell 12% year-on-year to 41.7 billion euros. Consolidated shipments in the first fiscal quarter were 1.335 million units, down 10% year-on-year.
NXP reported fiscal first-quarter revenue of $3.13 billion, in line with analysts' expectations, and adjusted earnings per share of $3.24 versus analysts' expectations of $3.18. The company expects fiscal second-quarter adjusted earnings per share of $3.00 to $3.41 versus analysts' expectations of $3.12 and revenue of $3.03 billion to $3.23 billion versus analysts' expectations of $3.11 billion.
Eli Lilly announced its fiscal first-quarter financial results. Eli Lilly raised its annual revenue and profit estimates as it struggled to meet soaring demand for its best-selling weight loss and diabetes medications. The company's first-quarter revenue was $8.77 billion, up 26% year-over-year and $160 million below market expectations. Non-GAAP EPS was $2.58, $0.09 above the consensus estimate.
Logitech's fourth-quarter sales were $1.01 billion, up 5% year-over-year, ending a two-and-a-half-year sales decline after a work-from-home boom during the pandemic and beating consensus of $950 million, earnings per share of $1.07, up 312% year-over-year, far exceeding consensus expectations of $0.44, and net income of $168 million, compared to the consensus of about $77 million.
HSBC Holdings' revenue for the first quarter of fiscal 2024 was US$20.8 billion, up 3% year-on-year, and its profit before tax was US$12.65 billion, higher than the consensus estimate of US$12.61 billion. The Board of Directors has approved the payment of an initial dividend of $0.1 per share. In addition, following the completion of the sale of the Bank of Canada business, the Board of Directors has approved a special dividend of US$0.21 per share, to be paid in June, together with the first dividend. HSBC is now planning to carry out share buybacks of up to US$3 billion, following the US$2 billion buyback announced at the time of the release of its 2023 annual results.
U.S. auto safety regulators are investigating Ford Motor Company's Blueccruise driver assistance feature after two fatal crashes involving the technology. The survey covered about 130,050 Mach-E models from 2021 to 2024, according to documents released on its website on Monday.
X4 Pharmaceuticals announced Tuesday that the U.S. Food and Drug Administration has approved XOLREMDI (Mavorixafor) capsules, the first drug for patients with WHIM syndrome. The approval follows positive results from the 4WHIM Phase 3 clinical trial, which showed significant improvement in the patient's condition.
Most U.S. Chinese concept stocks were lower on Tuesday, including Huya, Bilibili, JD.com, Tencent Music and Xpeng Motors.