After a firm close in the previous session, U.S. stock indices experienced variable performance on Tuesday. Although the Nasdaq underwent a significant downturn, the Dow rose to a fresh record closing high.
The Dow increased by 133.86 points, or 0.4 percent, closing at 38,467.31, whereas the Nasdaq lowered by 118.15 points, or 0.8 percent, to 15,509.90. The S&P 500 fluctuated before eventually settling down by 2.96 points, or 0.1 percent, at 4,924.97.
The dip in the Nasdaq was due to investors capitalizing on recent gains in the tech sector in anticipation of quarterly results from Google's parent company, Alphabet, and software behemoth, Microsoft, due to be released after trading hours.
Earnings reports from Apple, Amazon, and Meta Platforms are to be released in the next few days, adding suspense to the tech-sector's future. Moreover, forthcoming announcements from the Federal Reserve's monetary policy added a layer of uncertainty, prompting traders to secure tech-sector profits.
While the Federal Reserve is predicted to maintain current interest rates, its statement could considerably affect the future pathway for rates. There has been a decline in optimism for a March rate reduction, with several economists suggesting the Federal Reserve will delay reducing rates until May.
Conversely, the Dow's upward trajectory is attributed to considerable gains from JPMorgan Chase and Goldman Sachs.
In economic updates, the Labor Department reported an unforeseen surge in job openings for December. Openings increased to 9.03 million from an adjusted 8.93 million in November, exceeding expectations of a dip to 8.75 million from the previously reported 8.79 million.
The Conference Board revealed that consumer confidence in the U.S. continued to strengthen in January, with the index rising to 114.8 from 108.0 in December.
Next to face repercussions were airline stocks, with NYSE Arca Airline Index dropping by 2.6 percent due to weak performance. JetBlue Airways' share price fell significantly after presenting a better-than-anticipated deficit for the fourth quarter but predicting reduced revenues and escalating costs for the first quarter.
Oil service stocks similarly suffered despite a surge in crude oil prices, which caused the Philadelphia Oil Service Index to decline by 1.9 percent. Meanwhile, semiconductor and networking stocks faced noticeable downturns, affecting the Nasdaq, while oil producer stocks ascended alongside crude oil prices.
In global markets, Asia-Pacific stock indices exhibited a mixed performance on Tuesday. Japan's Nikkei 225 Index slightly rose by 0.1 percent and Australia's S&P/ASX 200 Index augmented by 0.3 percent, whereas Hong Kong's Hang Seng Index plummeted by 2.3 percent.
European markets also positively trended with the German DAX Index rising marginally by 0.2 percent, the U.K.'s FTSE 100 Index, and the French CAC 40 Index escalating by 0.4 percent and 0.5 percent correspondingly.
In the bonds domain, treasuries retracted close to the unchanged line after an initially strong performance, leaving the yield on the ten-year note, which inversely corresponds to its price, down by less than a basis point at 4.082 percent.
With the Federal Reserve's announcement coming up on Wednesday, traders will also be observing a report on private-sector employment.
