US Stocks Rebound Amid Earnings Season Kickoff and Market Caution

US stocks rebounded on Wednesday after the S&P 500 experienced three consecutive days of losses. The resurgence was fueled by gains in material and utility stocks, which each advanced by approximately 1%. In contrast, the real estate sector underperformed, slipping by about 0.3%.

The earnings season began on a strong note, boosting market sentiments. Although only less than 10% of S&P 500 companies have reported their earnings so far, a promising 75% have exceeded Wall Street expectations. United Airlines saw an impressive rise of over 8% after reporting a narrower-than-expected loss and outperforming revenue forecasts. Conversely, J.B. Hunt Transport Services dropped more than 7% due to not meeting analyst expectations on both revenue and earnings.

Amid these corporate results, the overall market outlook remains cautious. Investors are particularly concerned about the high interest rates and ongoing geopolitical uncertainties. Market volatility was evident on Tuesday following comments from Federal Reserve Chair Jerome Powell, who stated that the Fed requires more evidence of progress on inflation before considering rate cuts. These remarks did little to alleviate the prevailing market pessimism, emphasizing the role of corporate earnings in potentially driving future stock rallies.