U.S. stocks eked out a gain Tuesday, setting fresh closing highs ahead of an onslaught of company reports that promise insight into the state of the global economy. 

The S&P 500 and Nasdaq 100 both closed at all-time highs for the second day this week, while the cyclically-oriented Dow Jones Industrial Average slid 0.3 per cent. United Airlines Holdings Inc., Procter & Gamble Co., Verizon Communications Inc. all advanced on upbeat earnings reports while 3M Co. and Johnson & Johnson fell following disappointing guidance.

Netflix Inc. jumped more than 7 per cent in postmarket trading after reporting subscriber growth that topped estimates. Investors will also be watching for results from the Republican presidential primary as voters in New Hampshire head to the polls.  

Equities have largely been immune to the Federal Reserve’s warnings that interest-rate cuts are a ways off. Instead investors have cheered the economy’s resilience even after the most aggressive policy-tightening cycle in decades.  

But some corners of Wall Street are starting to question if the rally will endure as swaps traders in the U.S. rein in bets of a March rate cut. 

“The excitement is kind of gone at this point and everybody’s sobering up a little bit after the pivot party,” Emily Roland, the co-chief investment strategist of John Hancock Investment Management, said by phone. “Multiple expansions are starting to get a little tapped out here.”

“Recent weeks have seen an increasingly optimistic narrative in markets,” said Henry Allen, a strategist at Deutsche Bank. “But can this be sustained? When financial conditions get as accommodative as they are right now, it doesn’t tend to last long.”

“The data has been impressively resilient,” he added. “But we know that investors will eventually adjust for repeated upside surprises.”

Goldman Sachs warns that fast-twitch traders may be forced to sell over the next few sessions after building US$129 billion in long positions. 

Treasury yields mostly edged higher Tuesday with the benchmark 10-year at 4.14 per cent. The rate on policy-sensitive two-year fell 1 basis point to 4.38 per cent.

“The bounce in 2-year yields off the YTD lows achieved last week should embolden dip buyers,” BMO Capital Markets’ Vail Hartman wrote.

U.S.-listed Chinese shares gained after Bloomberg News reported Beijing is considering a package of measures to stabilize the falling stock market. 

Central banks are in focus this week. While the Bank of Japan held rates steady, Governor Kazuo Ueda said the certainty of achieving its projections has continued to gradually increase. That language supports the prevailing view among economists that the BOJ will raise rates at some point in the first part of this year. 

On Thursday, investor attention will shift to the European Central Bank’s meeting and whether officials there may indicate a start to policy easing. The U.S. will also get some of final pieces of data ahead of next week’s FOMC meeting with a fourth-quarter GDP readout Thursday and the Fed’s preferred gauge of inflation on Friday.

Bitcoin slumped for a second day — retail investors have been growing more bearish on the world’s largest cryptocurrency, according to a Deutsche Bank report. 

Meanwhile, West Texas Intermediate crude dipped below $75 a barrel after the U.S. advised caution for vessels transiting the Red Sea, but didn’t advise pausing shipping traffic. 

Corporate Highlights

• Apple Inc., reaching a make-or-break point in its decade-old effort to build a car, has pivoted to a less ambitious design with the intent of finally bringing an electric vehicle to market.
• Alibaba Group Holding Ltd. shares jumped after the New York Times reported that founder Jack Ma has been buying up shares in the company.
• Johnson & Johnson shares slid after the company said drug sales will be lower in the second half of the year than the first.
• Verizon gave guidance for 2024 adjusted earnings per share that topped the average analyst estimates.
• Homebuilder D.R. Horton Inc. sank after reporting weaker-than-expected quarterly orders.
• Coinbase Global Inc. fell after JPMorgan cut its recommendation on the cryptocurrency platform operator’s stock to underweight.

Key events this week:

• New Hampshire holds first-in-the-nation presidential primary, Tuesday
• Canada rate decision, Wednesday
• Eurozone S&P Global Services & Manufacturing PMI, Wednesday
• U.S. S&P Global Services & Manufacturing PMI, Wednesday
• Eurozone ECB rate decision, Thursday
• Germany IFO business climate, Thursday
• U.S. GDP, initial jobless claims, durable goods, wholesale inventories, new home sales, Thursday
• Japan Tokyo CPI, Friday
• U.S. personal income & spending, Friday
• Bank of Japan issues minutes of policy meeting, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.3 per cent as of 4 p.m. New York time
• The Nasdaq 100 rose 0.4 per cent
• The Dow Jones Industrial Average fell 0.3 per cent
• The MSCI World index rose 0.1 per cent

Currencies

• The Bloomberg Dollar Spot Index rose 0.2 per cent
• The euro fell 0.3 per cent to $1.0850
• The British pound fell 0.2 per cent to $1.2686
• The Japanese yen fell 0.2 per cent to 148.36 per dollar

Cryptocurrencies

• Bitcoin fell 1.7 per cent to $39,120.72
• Ether fell 5.5 per cent to $2,196.33

Bonds

• The yield on 10-year Treasuries advanced three basis points to 4.13 per cent
• Germany’s 10-year yield advanced six basis points to 2.35 per cent
• Britain’s 10-year yield advanced eight basis points to 3.99 per cent

Commodities

• West Texas Intermediate crude fell 0.3 per cent to $74.53 a barrel
• Spot gold rose 0.3 per cent to $2,028.72 an ounce