U.S. stocks muted amid earnings wave, dimming rate cut hopes By Investing.com

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Investing.com — U.S. stocks opened higher but muted on Tuesday, as investors eyed a new batch of corporate earnings and fresh interest rate commentary from Federal Reserve officials.

By 09:39 ET (14:37 GMT), the benchmark had gained 9 points or 0.2%, the tech-heavy had risen by 28 points or 0.2%, and the blue chip had climbed by 88 points or 0.2%.

The main indices in Wall Street ended the prior session in the red, dragged down by interest rate commentary from Federal Reserve Chair Jerome Powell. In an interview with CBS aired on Sunday, Powell suggested that recently strong economic data gave the Fed more time to wait before starting to bring borrowing costs down from more than two-decade highs.

The statement further tempered waning hopes for an imminent cut, placing upward pressure on U.S. Treasury yields and weighing on equities. Yields tend to move inversely to prices.

Other Fed policymakers are due to speak throughout the day on Tuesday, including Cleveland Fed President and voting member of the rate-setting Federal Open Market Committee.

Pharma stocks in focus

Eli Lilly (NYSE:) has reported fourth-quarter revenue that topped estimates thanks in large part to soaring demand for its weekly diabetes injection, sending shares in the U.S. drugmaker higher in early U.S. trading.

The company’s treatment — branded as Mounjaro — is in a race with a rival version from Denmark’s Novo Nordisk (NYSE:) to secure dominance in a booming market for weight-loss drugs that is estimated to be worth $80 billion a year by the end of the decade.

Worldwide revenue from Mounjaro, which was also approved for weight loss in the U.S. under the brand name Zepbound, surged to $2.2 billion in the three months ended on Dec. 31, above projections of $1.8B. In the corresponding period in 2022, sales of the treatment had registered $279.2 million. Much of the fourth-quarter total stemmed from the U.S., where higher prices, rising demand, and a favorable one-time change in rebates and discounts drove domestic revenue up to $2.11B.

Group-wide revenue spiked by 28% to $9.35B, well above an anticipated $8.96B.

Elsewhere on the earnings calendar, biotech group Amgen (NASDAQ:) and drug manufacturer Gilead Sciences (NASDAQ:) are scheduled to unveil their latest quarterly results after the bell.

Ford Motor (NYSE:) is also slated to post results. The U.S. carmaking giant’s numbers will come after Japan’s Toyota (NYSE:) raised its annual profit guidance following solid sales of its higher-margin and hybrid vehicles that partly drove a third-quarter earnings beat.

The world’s best-selling auto firm said it now expects income for the year ending in March to come in at 4.9 trillion yen, up from previous projections of 4.5 trillion yen. Analysts had seen the forecast at 4.6 trillion yen, according to LSEG data cited by Reuters.

Oil prices were volatile on Tuesday, as traders gauged geopolitical tensions and fading bets that the Federal Reserve will unveil early interest rate cuts.

Market participants are closely monitoring if U.S. Secretary of State Antony Blinken’s trip to the Middle East can result in a truce in the war between Israel and Hamas. The U.S. has also been continuing its campaign against Yemen-based Houthis, who have carried out attacks on shipping vessels in the Red Sea in response to the Israel-Hamas conflict.

Meanwhile, Reuters reported that analysts have flagged concerns that an extended period of restrictive Fed policy could weigh on activity in the U.S., the world’s top crude consumer. Sluggish growth in top oil importer China has also negatively impacted sentiment, Reuters added.

expiring in April had risen 0.7% to $78.55 a barrel, while West Texas Intermediate crude futures climbed 0.7% to $73.27 per barrel by 07:53 ET.

Oliver Gray contributed to this report.

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