Traders working on the floor of the New York Stock Exchange
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The end of Wall Street is mixed.
U.S. stocks closed mixed on Tuesday as Wall Street looked ahead to the Federal Reserve's interest rate decision. The benchmark S&P 500 ended almost flat, while the Dow Jones Industrial Average closed 0.35% higher, marking its seventh record close of the year. The Nasdaq Composite Index, which has a high proportion of high-tech stocks, fell 0.76%.
the alphabet is disappointing
Google's parent company Alphabet posted its fastest quarterly revenue growth since early 2022, with revenue up 13% from $76.05 billion a year earlier. However, advertising revenue fell short of analysts' expectations, and the stock price plummeted in after-hours trading.
Microsoft shines
Software giant Microsoft beat expectations as Azure cloud growth exceeded expectations. Microsoft's revenue increased 17.6% year-over-year in the quarter that ended Dec. 31. The company acquired video game publisher Activision Blizzard during the quarter, its largest deal to date.
Judge voids Musk's pay package
A Delaware judge has invalidated Tesla CEO Elon Musk's $56 billion compensation, ruling that the company's board failed to prove that its compensation plan was fair. Tesla shares fell more than 2% in extended trading.
[PRO] Bank stocks are back on the radar
Oppenheimer said investors need to overcome fears about bank stocks caused by deposit outflows and local bank failures last year. Analyst Chris Kotowski said bank stocks are “grossly undervalued,” adding that even mid-sized banks that struggled in 2023 could recover their fundamental performance.
Profits for tech giants Microsoft and Alphabet both managed to beat expectations for top and bottom profits. Still, that wasn't enough for Wall Street.
Google's parent company Alphabet posted its fastest quarterly revenue growth since early 2022, with revenue up 13% from $76.05 billion a year earlier. Earnings per share were $1.64, beating LSEG's consensus estimate of $1.59 per share.
However, the market seems unimpressed as investors sent the stock price plummeting. Alphabet stock fell nearly 6% in extended trading Tuesday.
Part of the reason is that the company's advertising revenue was soft revenue at $65.52 billion, which was lower than the $65.94 billion expected by analysts per StreetAccount.
Software giant Microsoft also announced better-than-expected results, but the outlook was a little less positive.
Cloud growth exceeded expectations as revenue from Azure and other cloud services increased 30% on an annual basis. Microsoft currently has 53,000 Azure AI customers, one-third of whom used Azure for the first time in the past year, CEO Satyanadera said on a conference call.
However, despite the strong results, Microsoft stock fell slightly in after-hours trading. Perhaps traders were taking a little profit.
Beyond profits, investors are also concerned about the Fed's interest rate decisions. Wall Street will be looking to post-meeting statements and comments from Fed Chairman Jerome Powell for clues about a change in the central bank's policy stance.
—CNBC's Jordan Novet and Ari Levy contributed to this report.
