NEW YORK — U.S. stocks are drifting in mixed trading Tuesday, as continued worries about high interest rates compete with strong profit reports from some big companies.
The S&P 500 was 0.1% lower in midday trading, coming off a sharp loss after bending under the pressure from a jump in Treasury yields. The Dow Jones Industrial Average was up 103 points, or 0.3%, as of 11:35 a.m. Eastern time, and the Nasdaq composite was basically flat.
A 5.7% climb for UnitedHealth helped support the market after the insurer reported stronger results for the first three months of the year than analysts expected. Morgan Stanley was another winner, rising 3.6%, after likewise topping expectations. Rebounds for some influential Big Tech stocks, including gains of 0.7% for Microsoft and 1.5% for Nvidia, also calmed the market.
But the majority of stocks on Wall Street fell. Northern Trust slumped 4.7% after the financial services company reported weaker earnings than analysts expected. Johnson & Johnson sank 1.7% despite topping profit forecasts. Its revenue came in a whisper below expectations.
Companies are under even more pressure than usual to report fatter profits and revenue because the other lever that sets stock prices, interest rates, looks unlikely to add much lift soon.
Traders are pushing out forecasts for when the Federal Reserve will begin cutting its main interest rate, which is at the highest level in more than two decades. A string of reports showing inflation and the overall economy remain hotter than forecast is raising worries the Fed will have to keep rates high for much longer than expected to get inflation fully back to its 2% target.
After jumping Monday on stronger-than-expected data on sales at U.S. retailers, Treasury yields rose again following a speech by the vice chair of the Federal Reserve.
Philip Jefferson said his expectation is for inflation to keep easing and for the Fed to hold its main rate “steady at its current level.” That contrasts with what he said in February, when he said “it will likely be appropriate to begin dialing back policy restraint at some point this year” if things went as he expected.
Fed Chair Jerome Powell will also be speaking in the afternoon, and that could send more swings through financial markets as traders trim forecasts for how many cuts to rates may arrive this year. After coming into 2024 expecting the Fed to deliver six cuts or more, according to data from CME Group, traders are now mostly calling for just one or two reductions.
The yield on the 10-year Treasury climbed to 4.65% from 4.61% late Monday and from 4.52% before the weekend.
The yield on the two-year Treasury, which more closely tracks expectations for Fed action, rose to 4.95% from 4.91% late Monday.
On Wall Street, stocks that tend to swing the most with interest rates were leading the market lower.
The sharpest losses in the S&P 500 hit utility stocks and real-estate investment trusts. They pay relatively high dividends and tend to attract the same kind of investors as bonds do. When bonds are paying higher yields, income-seeking investors may camp there instead.
High rates also can translate into more expensive mortgages, and stocks of homebuilders slumped after a report showed homebuilders broke ground on fewer sites last month than economists expected.
Lennar fell 2.2%, and D.R. Horton sank 1.9%.
The stock of Donald Trump’s social-media company slumped again. Trump Media & Technology Group fell another 11% to follow up on its 18.3% slide from Monday.
The company said it’s rolling out a service to stream live TV on its Truth Social app, including news networks and “other content that has been cancelled, is at risk of cancellation, or is being suppressed on other platforms and services.”
The stock has dropped below $24 after nearing $80 last month as euphoria fades around the stock and the company made moves to clear the way for some investors to sell shares.
In stock markets abroad, indexes tumbled across Asia and Europe as they caught up with the drubbing Wall Street took on Monday. Stock indexes fell 2.1% in Hong Kong, 2.3% in Seoul and 1.8% in London.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
