Wall Street bounces back as investors focus on earnings
Wall Street's main indexes have recovered some ground as investors focused on corporate earnings after US President Donald Trump's mounting criticism of Federal Reserve chair Jerome Powell led to a sharp sell-off in the previous session.
Investors sifted through a slew of quarterly earnings, with dozens more due through the week, for indications on how companies are navigating the uncertainty caused by tariffs and their expectations for a hit to future earnings.
"There's still a lot of uncertainty in the air with where tariffs will land ... but if we can look past that, the fundamentals in the markets still look very good," said Eric Sterner, chief investment officer for Apollon Wealth Management.
"Earnings are expected to grow 10 per cent for this first quarter, so corporate profits are still very healthy."
Shares of industrial conglomerate 3M Co, the biggest gainer on the blue-chip Dow, jumped 3.4 per cent after the company beat first-quarter profit expectations.
Verizon fell 2.4 per cent after posting a higher quarterly subscriber loss.
Northrop Grumman slumped 8.7 per cent after it reported a sharp drop in profit while RTX tumbled 8.0 per cent after the company flagged a potential hit of about $US850 million ($A1.3 billion) to annual profit from tariffs.
In early trading on Tuesday, the Dow Jones Industrial Average rose 568.66 points, or 1.49 per cent, to 38,739.07, the S&P 500 gained 69.03 points, or 1.34 per cent, to 5,227.23, and the Nasdaq Composite added 240.11 points, or 1.51 per cent, to 16,111.01.
Megacaps also recovered, with Nvidia rising 1.1 per cent and Apple up 1.7 per cent.
All sectors on the S&P 500 inched higher, with consumer discretionary taking the lead.
Tesla, which will kick off earnings for the "Magnificent Seven" group of megacap stocks after markets close, rose 2.1 per cent.
The mood, however, remained fragile as investors awaited Trump's next move in his relentless tussle with Powell over interest rates, fuelling concerns about the US central bank's autonomy and the future monetary policy path, which pushed Wall Street down more than 2.0 per cent on Monday.
Clarity on US tariff policy and the outcome of negotiations with individual countries on reciprocal levies are also in focus.
Indexes have fallen sharply this year as Trump's erratic trade policies rattled markets, with the S&P 500 more than 14 per cent below its February 19 record closing high.
A close 20 per cent below that mark would confirm that the index has entered a bear market.
The Nasdaq Composite confirmed it was in a bear market earlier this month.
The International Monetary Fund slashed its forecasts for growth in the US on Tuesday to 1.8 per cent in 2025, from 2.8 per cent growth in 2024.
Commentary from several Fed speakers is expected through the day.
Their remarks will be parsed for clues on the central bank's policy outlook and view on rising tensions with the White House.
Shares of Invesco leapt 8.7 per cent after the asset manager reported higher-than-expected quarterly profit.
Advancing issues outnumbered decliners by a 9.24-to-1 ratio on the NYSE, and by a 4.52-to-1 ratio on the Nasdaq.
The S&P 500 posted one new 52-week high and one new low while the Nasdaq Composite recorded 11 new highs and 27 new lows.
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