TOKYO — Most stocks are edging back from their big surge following a mixed set of earnings reports from U.S. companies. The S&P 500 was down 0.3% Tuesday, coming off its fifth straight winning month. The Dow was up 60 points, or 0.2%, and the Nasdaq was 0.7% lower. Norwegian Cruise Line tumbled despite reporting stronger profit for the spring than expected. Expectations have been high for it and rivals after its stock soared earlier this year. Worries have been rising about expectations broadly building too high for the market, which saw the S&P 500 surge 19.5% this year through July to a 16-month high.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street pointed slightly lower early Tuesday as market optimism set off by recent rallies was balanced by lingering worries about inflation.
Futures for the Dow Jones industrials ticked down 0.2% before the bell, while futures for the S&P 500 retreated 0.3%.
Several reports in the coming week could poke holes in the theory that inflation will keep coming down enough for the U.S. Federal Reserve not only to stop hiking interest rates, but to begin cutting them by early next year.
Big names in the market, such as Rob Arnott at Research Affiliates, are warning not to be “overly hasty in popping the champagne corks.” Arnott sees the possibility of inflation rebounding again later this year, even though it’s recently cooled considerably.
Fed Chair Jerome Powell has pointed to Friday’s upcoming report on the overall U.S. job market as an important data point. Growth needs to be strong enough to keep a lid on worries about a possible recession. But a reading that’s too hot could also mean upward pressure on inflation, which could push the Fed to get more aggressive about rates.
High rates undercut inflation by slowing the overall economy and dragging on prices for stocks and other investments. The Fed has already hiked its main rate to its highest level in more than two decades, a jolting shock after the rate began last year at virtually zero.
Two of Wall Street’s most influential stocks are also set to report their earnings for the spring: Amazon and Apple are both scheduled to release their latest quarterly results on Thursday. Because they’re two of the most massive stocks on Wall Street, their stock movements pack much more punch for the S&P 500 and other indexes than other stocks.
Both stocks have soared this year, in part on expectations for strong continued growth, and they’ll need to deliver to justify the big moves. Both Apple and Amazon are up more than 50% so far this year.
Uber rose almost 2% in premarket after the ride-hailing app surprised investors by turning a profit in its second quarter. San Francisco-based Uber earned 18 cents per share in the quarter, while analysts were expecting a one-cent-per-share loss.
Starbucks and dozens of other companies also report Tuesday in what will be a busy week of earnings releases.
In Europe at midday, France's CAC 40 shed 0.8%, while Germany's DAX fell 0.9%. Britain's FTSE 100 inched down about 0.2%.
Japan's Nikkei 225 rose 0.9% to finish at 33,476.58. Australia's S&P/ASX 200 gained 0.5% to 7,450.70. South Korea's Kospi jumped 1.3% to 2,667.07. Hong Kong's Hang Seng edged down 0.4% to 20,008.82, while the Shanghai Composite was virtually unchanged at 3,290.95.
The Japanese government released the nation's unemployment rate for June, which inched down 0.1 percentage point to 2.5%.
In energy trading, benchmark U.S. crude lost 19 cents to $81.61 a barrel. Brent crude, the international standard, fell 12 cents to $85.31 a barrel.
In currency trading, the U.S. dollar edged up to 142.98 Japanese yen from 142.24 yen. The euro cost $1.0972, down from $1.0993.
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Kageyama reported from Tokyo; Ott reported from Washington.
Yuri Kageyama And Matt Ott, The Associated Press
