The S&P 500 has ended slightly higher as gains in tech-related shares offset worries about a weakening outlook for earnings.
Gains in Amazon.com, Facebook and Apple gave the biggest boost to the S&P 500 and Nasdaq, which ended Tuesday up 0.5 per cent.
Netflix also rose, ending up 1 per cent, after Cowen and Co said the video streaming services provider would benefit from high viewership for the recently released third series of its original show Stranger Things.
Investors braced for remarks this week from Federal Reserve chairman Jerome Powell during his two-day testimony before the US Congress, which starts on Wednesday. Also due on Wednesday is the central bank’s June policy meeting minutes.
Wall Street’s main indexes have retreated from their record closing highs after a robust June jobs report on Friday tempered expectations of an aggressive 50-basis-point interest rate cut by the Fed.
“There may be some clarity coming out in the next couple of days based on what Powell says at these hearings,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
“The 10-year (Treasury) yield has just plummeted,” he said. “With flatter earnings coming into the third quarter, we’ve seen the PE multiple expansion courtesy of these lower rates.”
Trade tensions and their effect on corporate America will be front and centre when S&P 500 companies kick off the second-quarter earnings season next week.
RBC Capital Markets downgraded 3M to “sector perform”, citing macro pressures from China, and the auto and electronics sectors. The industrial conglomerate’s shares fell 2.1 per cent while the S&P industrial index ended down 0.2 per cent.
Analysts’ forecasts for S&P 500 companies profits weakened further on Tuesday, with second-quarter earnings now expected to have fallen 0.2 per cent from a year earlier, according to Refinitiv IBES data.
The Dow Jones Industrial Average on Tuesday fell 22.65 points, or 0.08 per cent, to 26,783.49; the S&P 500 gained 3.68 points, or 0.12 per cent, to 2,979.63; and the Nasdaq Composite added 43.35 points, or 0.54 per cent, to 8,141.73.
In another sign of the trade war’s impact, Germany’s BASF forecast a 30 per cent fall in its adjusted annual profit, citing trade friction.
The US and China are set to relaunch trade talks this week after a two-month hiatus. White House economic adviser Larry Kudlow said discussions with the European Union on a trade pact were also progressing.
Advancing issues outnumbered declining ones on the NYSE by a 1.02-to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favoured advancers.
The S&P 500 posted 29 new 52-week highs and no new lows; the Nasdaq Composite recorded 52 new highs and 49 new lows.
Volume on US exchanges was 5.77 billion shares, compared with the 6.74 billion average for the full session over the last 20 trading days.