Stock Market Today: A torrent of earnings reports leaves Wall Street mixed as small stocks continue to climb

NEW YORK (AP) — U.S. stocks were relatively flat on Wall Street Tuesday as earnings season picked up for major companies.

The S&P 500 index fell 8.67 points, or 0.2%, to 5,555.74. The Dow Jones Industrial Average fell 57.35 points, or 0.1%, to 40,358.09, and the Nasdaq Composite fell 10.22 points, or 0.1%, to 17,997.35.

But the small-cap Russell 2000 continued its strong run, rising 1%. They recently toppled the market leaderboard and soared on hopes of an upcoming interest rate cut.

The mixed exchanges took place as dozens of companies reported their results for springwith headliners Alphabet and Tesla set to appear after trading closes for the day. Expectations are high, with analysts predicting the strongest earnings growth for S&P 500 companies overall since late 2021, according to FactSet.

UPS was one of the heaviest weights in the S&P 500, falling 12.1% after reporting weaker earnings and revenue in the spring than analysts expected.

But CEO Carol Tom said the company's U.S. business delivered more packages than a year earlier, first growth of this type in nine quarters, and we called it a significant turning point for our business.

Nvidia was the biggest decliner on the S&P 500. Its 0.8% loss for the day was relatively modest, but the S&P 500 gives more weight to big stocks, and Nvidia is worth more than $3 trillion.

Comcast fell 2.6% after reporting lower-than-expected spring revenue. Its biggest declines came from lower attendance at its U.S. theme parks and studios, which haven't been as successful as last year's Super Mario Bros. and Fast X movies.

GE Aerospace helped offset those losses, rising 5.7% after beating analysts' profit forecasts in the spring and raising its full-year profit forecast.

Zions Bancorp. jumped 6.2% after reporting better-than-expected profit for the latest quarter. It and shares of other regional banks continue to rally after the sector's decline. crisis that began in March 2023triggered by the punitive effects of high interest rates.

Sherwin-Williams is another company that has felt the pain of high interest rates The company's goal is to keep inflation in check. It rose 6.9% after posting a higher-than-expected profit in the latest quarter. It said it has seen growth in demand for paint from new residential customers and expects that momentum to continue throughout the year.

This is despite high mortgage rates that have cooled the real estate sector. A report released Tuesday showed Sales of already occupied homes have declined Sales have slowed in part because prices for already occupied homes are at their highest level on record, according to the National Association of Realtors.

Rates could see a more benign period. With inflation slowing, Wall Street expects the Federal Reserve to begin cutting its key interest rate in September. That would provide some relief to the economy and financial markets after the Fed kept the federal funds rate at its highest level in more than two decades.

Treasury yields have fallen since the spring on those expectations and remain below their April highs. The yield on the 10-year Treasury note was steady at 4.25%, where it was late Monday.

Hopes of lower interest rates have particularly benefited small stocks recently. They can benefit more from lower interest rates than their larger rivals.

It’s a sharp turnaround for small stocks, which have lagged their larger rivals for some time, including a small group known as the Magnificent Seven. Analysts see it as an encouraging sign that more stocks are participating in a rising market, rather than just a few dominant elites.

Corporate profits will need to be strong overall for the U.S. stock market to stay near its record highs, especially as critics say stocks don’t look cheap after such a run. What CEOs say about upcoming earnings will also be key, according to Chris Haverland, global equity strategist at Wells Fargo Investment Institute, as investors watch for signs that companies have less ability to sustain their high prices.

In foreign stock markets, indices were mixed in Asia and Europe.

Chinese markets were among the weakest, with stocks falling 0.9% in Hong Kong and 1.6% in Shanghai. Analysts called the Chinese central bank's moves to cut its two main interest rates on Monday unencouraging.