Market Momentum Continues as Stocks Hover Near Record Highs
The US stock market is on track to wrap up its second consecutive winning week, with the S&P 500 barely budging in early trading after reaching an all-time high on Thursday. As of 9:35 am Eastern time, the Dow Jones Industrial Average had slipped 0.2%, or 70 points, while the Nasdaq composite edged up 0.1%.
Bond Market Stability Supports Stocks
A relatively calm bond market has helped keep the stock market steady, as investors weigh concerns about inflation and the US government’s growing debt. When these worries intensify, Treasury yields tend to rise, putting downward pressure on stock prices. Conversely, when concerns ease, yields decline, and stocks tend to rally.
Earnings Season Off to a Strong Start
The current earnings reporting season has gotten off to a promising start, with many big US companies delivering encouraging results. This has helped prop up the stock market, as investors focus on companies’ ability to generate profits despite higher Treasury yields. As Brian Jacobsen, chief economist at Annex Wealth Management, notes, “2025 is shaping up to be the year of earnings.”
Verizon and Novo Nordisk Lead the Charge
Verizon Communications was one of the top performers on the S&P 500, surging 2.5% after reporting quarterly results that exceeded analysts’ expectations. The company’s price increases in recent quarters contributed to its strong performance. Novo Nordisk’s US-listed shares soared 9.7% after the Danish company announced positive results from a clinical trial of a treatment for overweight and obese individuals.
Texas Instruments and CSX Disappoint
On the flip side, Texas Instruments tumbled 6.2% despite reporting profit that topped analysts’ expectations. Investors were discouraged by signs that the tech company’s profit margins are under pressure. CSX sank 2.8% after its revenue for the last three months of 2024 fell short of analysts’ forecasts, despite delivering a profit that matched expectations.
Global Markets Mixed
In the bond market, the yield on the 10-year Treasury held steady at 4.65%. Overseas, European and Asian indexes were mixed, with Tokyo’s Nikkei 225 edging down 0.1% after the Bank of Japan raised its benchmark interest rate to 0.5%. Stocks in Hong Kong and Shanghai, however, posted significant gains, rising 1.9% and 0.7%, respectively.
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