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The Federal Reserve’s two-day Federal Open Market Committee meeting starts on Tuesday.

(Photo by Karen Bleier/AFP via Getty Images)

Major stock indexes were slightly below water on Tuesday, on a packed day of earnings reports. Roughly one in 10 S&P 500 companies releases first-quarter results on Tuesday.

The

S&P 500

had slipped 0.2% on Tuesday morning, a day after hitting a record high. The

Nasdaq Composite

lost 0.4%, and the

Dow Jones Industrial Average

was off 53 points, or 0.2%.

With roughly a third of the S&P 500’s market capitalization having reported their results through Monday, about 83% of companies have topped earnings estimates–by 23% in aggregate–according to data from Credit Suisse strategists. Shares of companies surpassing expectations on revenue and earnings have generally risen after reporting, but expectations coming into first-quarter earnings season were already high, and big beats haven’t always meant big stock reactions.

Microsoft

(ticker: MSFT),

Alphabet

(GOOGL),

Advanced Micro Devices

(AMD),

Visa

(V), and

Texas Instruments

(TXN) are among the companies set to report after Tuesday’s close.

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The Federal Reserve’s two-day Federal Open Market Committee meeting for April begins on Tuesday. The meeting, which culminates in a policy statement and press conference from Chair
Jerome Powell
on Wednesday, will give markets a sense of the central bank’s latest position on inflation and monetary policy.

Michael Hewson, an analyst at CMC Markets, said of the Fed meeting that there is “little expectation of any distinct change of tone from what we saw in March, with the U.S. dollar expected to come under further pressure in the short term.”

The

U.S. Dollar Index

(DXY), which tracks the greenback versus a basket of other currencies, has strengthened recently as U.S. Covid-19 vaccination rates have outpaced much of the rest of the world, and U.S. GDP growth expectations have climbed.

In Asia on Tuesday, Tokyo’s Nikkei 225 fell 0.5%, while Hong Kong’s Hang Seng dipped less than 0.1%. The Shanghai Composite Index rose less than 0.1%. Both the FTSE 100 in London and Frankfurt’s DAX fell about 0.3%. Paris’ CAC 40 was down 0.1%.

But for now, it’s all eyes on earnings. Macro forces may take a back seat as investors sort through the hundreds of reports coming out this week.

United Parcel Service

(UPS) shares were up 11.8% after the company posted earnings of $2.77 a share on revenue of $22.7 billion, beating estimates for $1.72 on sales of $20.6 billion.

Tesla

(TSLA) shares were down 4% after the company reported a profit of 93 cents a share on sales of $10.4 billion, better than the expected 79 cents and $10.3 billion.

General Electric

(GE) shares fell 3.3% after the company said it earned 3 cents a share, beating estimates for 1 cent, on revenue of $17.1 billion, below forecasts for $17.5 billion.

3M

(MMM) stock lost 2.8% after the industrial conglomerate reported earnings of $2.77 a share from $8.9 billion in sales. Both were ahead of Wall Street consensus of $2.30 in per-share earnings from $8.5 billion of sales.

Eli Lilly

(LLY) stock fell 1.8% after it missed analysts’ earnings forecast and cut its earnings guidance for its 2021 fiscal year. The drugmaker cited weaker-than-expected sales of Covid-19 antibodies.

Maersk

(AMKBY) slipped 0.2% after the shipping giant issued a positive trading update after the close on Monday. The group’s preliminary earnings for the first quarter show that volumes rose 5.7% compared with the same period last year, while average freight rates jumped 35%. Maersk added earnings guidance for 2021 well ahead of analyst expectations.

Shares in

BP

(BP) rose 0.4%, as the oil major committed to rewarding investors with a $500 million share buyback program after meeting debt reduction targets. Profits in the first quarter of 2021 also firmly beat analyst expectations, with underlying net profit on a replacement cost basis–the measure most closely watched by analysts–coming in at $2.6 billion, ahead of the $1.5 billion consensus.

Banking giant

HSBC’s

(HSBC) shares jumped 4%, after the group’s net income for the first quarter of $3.9 billion beat the analyst consensus by more than $1 billion. The group said that profit before tax in the quarter was 79% higher than in the same period in 2020.

UBS

(UBS) was another financial heavyweight to report, but the results sent the stock down 1.6%. The Swiss bank reported strong earnings for the first quarter of 2021, with profit before tax up 14% from the year prior, but the results were marred by a surprise $774 million loss related to the meltdown of hedge fund Archegos Capital.

Lyft

(LYFT) stock gained 2% Tuesday after the ride-sharing company said Monday evening that it had reached a deal to sell its self-driving vehicle unit to a

Toyota

(TM) subsidiary for about $550 million in cash.

GameStop

(GME) stock surged 8% after the videogame retailer said it completed a $551 million stock sale. It follows a 11.5% rise on Monday for the volatile meme stock.

Splunk

(SPLK) shares fell 4.7% after Morgan Stanley downgraded the stock to Equal Weight from Overweight.

Verizon

(VZ) shares were down 0.9% after Moffett Nathanson downgraded the stock to Neutral from Buy.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

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