After an initial upward movement, the major U.S. stock indexes have diverged over the course of Tuesday's trading session. The Dow remains in positive territory, while the Nasdaq and S&P 500 have fallen into the negative.
As of now, the major averages are split across the unchanged line. The Dow is up 164.28 points, or 0.4%, at 40,704.21. Meanwhile, the Nasdaq is down 74.71 points, or 0.4%, at 17,295.49, and the S&P 500 has dipped 4.51 points, or 0.1%, to 5,459.03.
This mixed performance on Wall Street is attributed to anticipation ahead of the Federal Reserve's monetary policy announcement scheduled for Wednesday.
The Fed is largely expected to maintain current interest rates, but the accompanying statement will be closely scrutinized for any indications regarding the central bank's potential decision in September.
With Fed officials frequently stating that "greater confidence" in slowing inflation is necessary before cutting rates, recent inflation data has led to optimism about a rate cut in September.
According to CME Group's FedWatch Tool, there is currently an 87.7% chance of a quarter-point rate cut in September, with an 11.9% chance of a half-point cut.
Traders are also anticipating earnings reports from major companies such as Microsoft (MSFT), Advanced Micro Devices (AMD), and Starbucks (SBUX) after today's market close.
The Dow's advance comes even as Merck (MRK) shares plummet 9.9%. This decline follows the company's better-than-expected second-quarter results but disappointing full-year earnings guidance.
Procter & Gamble (PG) shares have also dropped 6.3% following second-quarter earnings that surpassed analyst estimates but were coupled with weaker-than-expected revenues.
In contrast, Dow components Goldman Sachs (GS), Travelers (TRV), and JPMorgan Chase (JPM) are showing strong gains for the day.
### Sector News
While most major sectors are experiencing modest movements, airline stocks have surged, with the NYSE Arca Airline Index up 4.4%.
JetBlue (JBLU) shares have soared by 22.4% after reporting an unexpected second-quarter profit alongside better-than-expected revenues.
The telecom sector has also shown substantial strength, with the NYSE Arca North American Telecom Index rising by 3.5%, reaching its best intraday level in over a year. Lumen Technologies (LUMN) has led this surge, skyrocketing by 46.4%.
Additionally, banking, oil producer, and networking stocks are showing notable strength. On the downside, pharmaceutical and semiconductor stocks have lagged.
Lattice Semiconductor (LSCC) shares have notably declined, impacting the semiconductor sector after the company reported weaker-than-expected second-quarter results and disappointing third-quarter revenue guidance.
### Other Markets
In international trading, the Asia-Pacific stock markets closed mostly lower on Tuesday, with Hong Kong's Hang Seng Index dropping 1.4% and South Korea's Kospi falling 1.0%. However, Japan's Nikkei 225 Index rose by 0.2%.
Conversely, European markets have performed positively. The German DAX Index advanced by 0.7%, the French CAC 40 Index rose 0.6%, and the U.K.'s FTSE 100 Index edged up by 0.1%.
In the bond market, treasuries are displaying a lack of clear direction as traders await the Fed's announcement. Consequently, the yield on the benchmark ten-year note, which moves inversely to its price, is down by less than a basis point at 4.173%.
