On the winning side of Wall Street was D-Wave Quantum, which jumped 32.1 per cent after releasing its latest quantum computing system. The company says it can solve complex problems beyond the reach of classical computers.
Home Depot slipped 0.7 per cent after it reported better revenue than analysts expected for the start of the year, though its profit came up just short of forecasts. Perhaps more importantly for Wall Street, the home-improvement retailer also said it’s sticking with its forecasts for profit and sales growth over the full year.
That’s counter to a growing number of companies, which have recently said tariffs and uncertainty about the economy are making it difficult to guess what the upcoming year will bring. President Donald Trump has launched stiff tariffs against trading partners, only to delay or roll many of them back. Traders are hopeful that Trump will eventually lower his tariffs after reaching trade deals with other countries, but that’s not a certainty.
Target and Home Depot rival Lowe’s will report their latest results on Wednesday.
In the bond market, the yield on the 10-year Treasury rose to 4.48 per cent from 4.46 per cent late Monday. The two-year yield, which more closely tracks expectations for action by the Federal Reserve, edged down to 3.96 per cent from 3.97 per cent late Monday.
Concern still remains that Trump’s tariffs could push the US economy into a recession, even if it’s held up OK for the time being. If a recession does happen, the US government may have less room to offer support for the economy through big spending plans or direct stimulus checks to households than in prior downturns. That’s because the US government’s debt is so much higher now, and it could be set to get even bigger with Washington debating more cuts to taxes.
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If the US government can’t offer as much fiscal support for the economy, that could make the next recession deeper and last longer, according to James Egelhof, chief US economist and other strategists at BNP Paribas. That could put more pressure on the Federal Reserve to prop up the economy by itself through lower interest rates.
Other central banks around the world have already begun cutting interest rates.
China’s central bank made its first cut to its loan prime rates in seven months in a move welcomed by investors eager for more stimulus as the world’s second-largest economy feels the pinch of Trump’s higher tariffs. Tuesday’s cuts probably won’t be the last this year, Zichun Huang of Capital Economics said in a report.
Following the cuts, stock indexes rose across much of the world. Hong Kong’s Hang Seng jumped 1.5 per cent for one of the bigger gains.
Shares in China’s CATL, the world’s largest maker of electric batteries, jumped 16.4 per cent in its Hong Kong trading debut after it raised about $US4.6 billion in the world’s largest IPO this year. Its shares traded in Shenzhen, mainland China’s smaller share market after Shanghai, gained 1.2 per cent after dipping earlier in the day.
AP
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