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Investing.com — U.S. stock markets opened mixed on Tuesday, as extremely strong earnings from retailers revived fears about inflation and a possible early tightening of monetary policy, undermining overnight gains in futures contracts.
Both Walmart (NYSE:WMT) and Home Depot (NYSE:HD) blew past expectations with their quarterly reports, apparently more than able to pass on higher input costs to consumers flush with cash after the latest round of stimulus checks.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 36 points, ior 0.1%, at 34,364 points. The S&P 500 was up 0.1% and the Nasdaq Composite was up 0.4%. All three major indices had opened the week with losses on Monday.
The mood was also hit by Treasury Secretary Janet Yellen refreshing the theme of higher corporate taxes in a speech to the U.S. Chamber of Commerce. Yellen told the Chamber that U.S. corporate taxes are ‘at a historic low’.
However, it was the retail earnings that most caught the eye. Walmart stock rose 3.5% after the company reported a 6% rise in same-store sales excluding fuel in the three months through April. CEO Doug McMillon said he was now more optimistic than at the start of the year, anticipating pent-up demand to keep sales buoyant all year.
Home Depot stock meanwhile fell 0.1%, despite signs that customers not been put off buying lumber (around 10% of its sales) despite the sharp rise in prices for it this year.
Analysts expect the last quarter to represent something of a high-water mark for the home improvement sector, as the reopening of the economy drains money away from merchandise goods and into services and experiences.
