U.S. equities turned higher by midday Tuesday, recovering from a weak open as small-cap and rate-sensitive shares led the advance, while technology stocks lagged. The market's momentum shifted from a narrow pullback in large caps to a broader, earnings-driven rally.
At 12:51 p.m. ET, the S&P 500 was up 0.37% at 7,718.93, standing 0.52% above its opening level. The Russell 2000 outperformed with a 1.64% gain, while the Nasdaq Composite added just 0.16%. The Dow Jones Industrial Average climbed 1.02%, trading 1.03% higher than its open.
Breadth Improves
The session's breadth was notably better than Monday's tech-led rebound. According to the live SPY holdings list, 395 of 506 names (78%) were advancing, reducing reliance on mega-cap stocks. Equal-weight funds also outperformed: the Invesco S&P 500 Equal Weight ETF (RSP) rose 0.98%, beating SPY by 0.59 percentage point. The iShares Russell 2000 ETF (IWM) climbed 1.62%, extending the small-cap lead.
Sector Rotation
Healthcare led sector gains, with the Health Care Select Sector SPDR Fund (XLV) up 2.26%. Real estate (XLRE) and utilities (XLU) followed, rising 1.70% and 1.32%, respectively. Financials (XLF) added 1.08%, contributing to the cyclical advance. Technology (XLK) managed a 0.10% gain, recovering 0.95% from its open but remaining nearly flat versus Monday. Energy (XLE) slipped 0.25% as crude oil prices retreated.
Bond markets provided partial support. The 10-year Treasury yield fell 1.3 basis points to 5.123%, while the 30-year yield dropped 3.1 basis points to 5.441%, helping long-duration sectors.
Commodities and Currencies
Brent crude fell 1.0% to $108.44 per barrel after touching $111.97 earlier, while WTI lost 0.8% to $97.72. The U.S. dollar index slipped 0.24%, and gold futures eased 0.34% to $4,146.10 per ounce.
Earnings Highlights
Company results drove individual stock moves. Equifax (EFX) surged 9.7% after reporting a 10% revenue increase to $1.693 billion, with U.S. mortgage revenue up 15%. Hasbro (HAS) climbed 7.0% after quarterly revenue rose 15% and management raised its outlook, with Magic: The Gathering revenue exceeding $600 million for the first time. 3M (MMM) advanced 5.9% after lifting adjusted EPS guidance to $9.10-$9.15.
General Motors (GM) fell 7.9% despite $50.0 billion in revenue and a new $20 billion buyback authorization. Airlines gained as oil retreated: American Airlines (AAL) rose 4.8% and United Airlines (UAL) added 2.8%.
Braze (BRZE) surged 51.6% to $45.56 after Salesforce (CRM) agreed to acquire it for $47.50 per share in cash, a deal valued at $5.66 billion. Salesforce shares eased 0.7%.
Analyst Actions
Recent analyst calls highlighted challenges for the top movers. RBC's $177 price target on Equifax sat just 1.7% above midday trade, while Citi's $117 target on Hasbro implied about 11% upside. These calls predated Tuesday's results and may be revised.
Market Outlook
Risks remain, as oil stays above $108 after a $6 intraday range, and the 10-year yield recovered from its morning low. Renewed increases could reverse gains in real estate, small caps, and airlines. Investors now await Netflix (NFLX) earnings after the close, followed by Tesla (TSLA) on Wednesday, to see if growth earnings can narrow the gap between the Nasdaq and the broader market.
