Wall Street closes lower after a volatile day as investors seek earnings

Investors contrasted Bank of America’s upbeat earnings with skyrocketing bond yields ahead of more earnings clues this week, and U.S. stocks closed lower on Monday after flip-flopping during afternoon trade. Market investors are bracing for a flurry of earnings reports that will help them gauge the impact of the Ukraine conflict and a surge in inflation on company finances. This week, Netflix, Tesla, Johnson & Johnson, and International Business Machines will all release earnings.

The topsy-turvy trading session was exacerbated by low trade volumes following the Easter vacation, as well as European markets remained closed on Monday. “The market is looking for direction, and we might get it from earnings,” said Jack Janasiewicz, portfolio manager and lead portfolio strategist at Natixis Investment Managers. “But the overarching factors remain what China looks like with its zero-COVID policy, and what the Fed looks like going forward in terms of interest rates and inflation,” he added.

“It’ll be a while before any of them offers us any clear guidance, so I wouldn’t be surprised if we just continue to trade in a range.” Its stock price increased, as did the S&P 500 banks index. The benchmark 10-year Treasury yield rose to 2.85 percent on Monday, after hitting 2.884 percent earlier in the day, the highest since December 2018. Megacap equities including Apple Inc and Meta Platforms fell as the benchmark 10-year Treasury rate rose to 2.85 percent.

Expectations of a succession of interest rate hikes have put pressure on shares of market-leading technology and growth businesses, threatening to diminish their future profitability. Tesla, on the other hand, has risen as it prepares to reopen its Shanghai facility after a COVID halt that lasted nearly three weeks. The majority of the S&P’s 11 major sectors were down. Bank of America finished out the earnings season for the big Wall Street banks, posting strong growth in its consumer lending sector despite a slowdown in deal making in its investment banking operation.

One of the few anomalies was the energy index. Crude prices rose, with Brent reaching $114 a barrel at one stage, as outages in Libya exacerbated fears about global supply constraints. Valero Energy Corp, Phillips 66, and Marathon Petroleum Corp were among the top performers in the refining sector. The S&P 500.SPX> up 0.02 points, or 0.02 percent, to 4,391.65 points, while the Nasdaq Composite fell 17.67 points, or 0.14 percent, to 13,331.92. The Dow Jones Industrial Average dropped 34.77 points to 34,416.46, or 0.10 percent. The stock of Charles Schwab Corp dropped after the financial services firm missed quarterly earnings forecasts.

Twitter’s stock soared after the microblogging site adopted a “poison pill” on Friday that barred Tesla CEO Elon Musk from increasing his stake to more than 15% for a year. Didi Global Inc fell after the Chinese ride-hailing operator said that an extraordinary general meeting will be held on May 23 to vote on its delisting plans in the US.