NEW YORK, United States — The rally in Wall Street stocks took a pause Tuesday while many overseas bourses pushed higher amid renewed optimism that the US Federal Reserve could cut interest rates this year.
Major US indices finished flat after a choppy session, a sideways performance that could persist until investors digest significant economic releases later in the month.
“The market might just be due for some pause, consolidation,” said LBBW’s Karl Haeling.
Analysts pointed to light trading volume in a comparatively quiet period of news after last week saw major earnings reports, economic releases, and a Fed decision.
Upcoming potential catalysts include US consumer price data and Walmart results, both of which are scheduled for next week.
READ: Wall Street rises to add to last week’s gains
Wall Street had risen the last three days following Fed Chair Jerome Powell’s statement last week that he does not expect further interest rate hikes.
Earlier Tuesday London reached yet another record high, as did Amsterdam.
“This week is light on high-profile economic data, but heavy on Fed members hitting the speaking circuit,” said Chris Larkin at E*Trade from Morgan Stanley.
“Traders will be dissecting any comments they make about potential rate cuts.”
Corporate earnings
The focus is also on the first-quarter earnings season.
Swiss banking giant UBS on Tuesday said net profit rose 71 percent to nearly $1.8 billion in the January-March period, far exceeding expectations, after two quarters in the red owing to its mammoth takeover of Credit Suisse.
READ: UBS back in profit after Credit Suisse takeover losses
Switzerland’s biggest bank said its turnover increased by 46 percent to $12.7 billion, largely thanks to its investment banking arm, which had been the key part of the mega-merger.
UBS shares rallied on the Swiss stock exchange, finishing the day up more than seven percent.
On the downside, shares in BP eased 0.7 percent after the British energy giant said its net profit slumped 72 percent in the first quarter, as gas prices declined from a year earlier.
Profit after tax tumbled to $2.3 billion from $8.2 billion in the first three months of 2023.
Shares in Disney slumped nearly 10 percent in New York despite reporting its first streaming profit.
“Expectations for Disney’s earnings were high, as the share price has risen by nearly 30 percent year-to-date,” said Kathleen Brooks, research director at XTB.
“With a decent rally coming into these results, nothing less than perfection was acceptable to the market,” she added.
Disney saying this quarter’s entertainment revenues were softer than expected may have also spooked investors, Brooks said.