S&P 500 is highest since April 2022

Wall Street strengthened Tuesday after more companies reported fatter profits for the spring than expected.

The Standard & Poor’s 500 index rose 12.82 points, or 0.3%, to 4,567.46 and its highest close since early April 2022. The Dow Jones industrial average gained 26.83 points, or 0.1%, to 35,438.07, and the Nasdaq composite climbed 85.69 points, or 0.6%, to 14,144.56.

General Electric helped lead the market higher with a 6.3% rally after it reported stronger profit for the latest quarter than analysts expected. It also raised its forecasts for full-year revenue and profit.

Another industrial giant, 3M, advanced 5.3% after the maker of Scotch-Brite scouring pads and Post-it sticky notes raised its forecast for profit for the full year thanks in part to costcutting efforts. Home builder PulteGroup climbed 6.2% after reporting stronger profit for the spring than expected.

On the losing side of Wall Street were airline stocks, led by Alaska Air Group. It fell 9.7% despite reporting stronger profit and revenue for the latest quarter than expected. Analysts said investors may have been disappointed with its forecasts for the current quarter.

Raytheon Technologies tumbled 10.2% after saying accelerated removals and inspections are needed for some of its Pratt & Whitney aircraft engines to look for a rare condition in powder metal. That pushed the company to lower its forecast for this year, though it also reported stronger profit for the spring than analysts expected.

This week is a busy one for earnings reports, and roughly 30% of the companies in the S&P 500 are on the schedule. The majority have been topping analysts’ expectations this reporting season, as is usually the case.

Two of Wall Street’s most influential stocks reported their results after trading closed for the day, Microsoft and Alphabet. They are two of the seven stocks behind the majority of the S&P 500’s nearly 16% gain through the first half of the year.

That “Magnificent 7” will need to deliver strong results to justify their huge gains for the year so far, as their stocks soared on expectations that they’ll continue to deliver strong growth. Both Alphabet and Microsoft are up more than 38% for the year.

United Parcel Service, meanwhile, swung between gains and losses after reaching a tentative contract deal with 340,000 unionized workers to raise pay, which potentially averts a strike. UPS ended the day down 1.9%.

This week’s other highlight for Wall Street also got underway Tuesday: the Federal Reserve’s latest meeting on interest rates.

The wide expectation is for the Fed on Wednesday to announce another increase to interest rates as it tries to get inflation under control. That would take the federal funds rate to a range of 5.25% to 5.50%, its highest level since 2001 and up from virtually zero early last year.

High rates grind down on inflation by slowing the entire economy and hurting prices for stocks and other investments. The hope among traders is that Wednesday’s move will be the final increase of this cycle because inflation has been cooling since last summer.

Such hopes, along with rising belief that the economy can avoid a long-predicted recession, have helped stocks rally strongly this year. The job market has remained remarkably solid, which has allowed U.S. households to keep spending and propping up the economy. A report Tuesday showed confidence among U.S. consumers rose by more than economists expected.

But many on Wall Street warn that the Fed is unlikely to give any signals Wednesday that it’s done raising rates. Inflation is still high, even if it’s moderated somewhat, and the economy may have to “yield to a long but shallow recession if the Fed is to return inf lation to its 2% target,” said Steven Ricchiuto, U.S. chief economist at Mizuho Securities.

In the bond market, yields were mixed for Treasurys.

The 10-year Treasury yield was holding at 3.88%. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on the market’s expectations for Fed action, slipped to 4.88% from 4.92%.