The fourth quarter earnings season has displayed impressive growth figures, yet the outlook appears less optimistic, as noted by Bank of America.

Ohsung Kwon, an equity and quantitative strategist at Bank of America, indicated in a client memo that this quarter has recorded the most substantial earnings growth since 2021.

“So far, 385 companies, accounting for 84% of S&P 500 earnings per share (EPS) and 80% of total market capitalization, have reported their results. The consensus EPS stands 5% above its January 1 level, with notable contributions from Consumer Discretionary (+11%), Industrials (+11%), and Financials (+10%),” Kwon shared.

Despite these robust results, Kwon noted that there are twice as many companies issuing below-consensus forecasts compared to those providing optimistic guidance. This trend has caused a downward adjustment in full-year earnings projections for 2025.

“Consensus EPS for 2025 has seen a 1% year-to-date reduction, bringing it down to $271, aligning with typical seasonal trends from 2001 to 2023, but marking a more significant cut than in non-recession years (an average of -0.4%). The decrease was primarily driven by the Materials sector, which saw a 7% drop, while Financials experienced upward revisions of 1.5% year-to-date,” Kwon elaborated.

— Jesse Pound

UBS has labeled Edison International‘s stock as undervalued following recent California wildfires, according to UBS analysts.

Analyst Gregg Orrill upgraded the utility company’s stock from neutral to buy, stating that the current market price reflects excessive negative sentiment regarding the aftermath of fire-related damages.

“After the Eaton fire incident, the stock re-rated to a staggering -52% P/E discount. However, California’s $21 billion wildfire fund is sufficient to cover the Eaton fire losses. Investors’ primary concern revolves around possible future fires. The stock currently factors in a maximum liability of $3.9 billion for repaying the fund alongside a sub-13% cash from operations to debt ratio against our base case for Eaton fire exposure of up to $1 billion,” Orrill explained.

Furthermore, Orrill noted that Edison recently conducted inspections on equipment that might pose a wildfire risk.

UBS has also adjusted the price target for the stock from $69 to $65 per share, which still represents nearly a 30% upside from its recent closing value.

“The revised $65 price target indicates a -30% discount P/E, which falls one standard deviation below the average P/E since early 2017,” Orrill added.

— Jesse Pound

On Tuesday, the S&P 500 index opened on a positive note, maintaining proximity to a new record high to kick off a shortened trading week.

The broader market index increased by 0.13%, while the Nasdaq Composite rose by 0.34%. However, the Dow Jones Industrial Average fell by 75 points, or 0.17%.

— Brian Evans

Manufacturing activity in New York has seen improvement, yet inflation metrics have surged, and confidence has diminished, as reported by a New York Federal Reserve survey.

The Empire State Manufacturing Index for February increased to 5.7, reflecting an 18-point rise back into growth territory. Economists surveyed by Dow Jones had predicted a reading of -1 for the index, which assesses the percentage of companies in expansion versus contraction.

Metrics such as shipments, unfilled orders, and inventories showed positive growth. However, several underlying indicators told a different story.

The prices paid index jumped to 40.2, marking an 11.1-point rise to its highest level in nearly two years, while the prices received index rose to 19.6, up 10.3 points. Additionally, the future expectations index tumbled 15 points to 22.2, and the employment index saw a decline of 4.8 points to -3.6 amidst concerns over tariffs leading to a potential trade war. New orders also experienced a drop of 16.4 points, though they remained positive at 17.8.

— Jeff Cox

Here are some notable stocks making headlines during Tuesday’s pre-market session:

• Delta Air Lines — Shares declined 0.8% following a crash on a Delta flight from Minnesota to Toronto on Monday afternoon, which resulted in at least 18 injuries.
• Southwest Airlines — Shares rose 2.4% after the airline announced plans to cut 15% of its corporate workforce, a move CEO Bob Jordan described as “unprecedented.”
• Fluor — The engineering company’s stock fell by 5.5% after announcing weaker-than-expected fourth-quarter earnings and guidance for the upcoming year.

View the complete list here.

— Alex Harring

Barclays has downgraded Moderna from overweight to equal weight, pointing to increased policy uncertainties and limited clinical developments as key factors.

Analyst Gena Wang slashed her price target from $111 to $45, representing a significant decrease of 59%. Despite this reduction, the new target is still approximately 36.4% above the stock’s closing price on Friday.

“Though we maintain our belief in MRNA’s unique RNA technology, we anticipate limited upside for the stock in the near term due to macroeconomic uncertainties, vaccine policy risks in the US, and the absence of significant clinical catalysts,” Wang stated in a research note released Monday.

Over the past year, the pharmaceutical company has faced challenges, with shares dropping 20.6% in 2025 and nearly 63% over the last 12 months.

— Hakyung Kim

Asian markets experienced mixed results on Tuesday as investors evaluated comments made by Chinese President Xi Jinping regarding support for the private sector.

Australia’s S&P/ASX 200 closed down 0.66% at 8,481, following a 25-basis-point interest rate cut by the Reserve Bank of Australia, marking its first reduction in over four years.

Japan’s benchmark Nikkei 225 gained 0.25% to reach 39,270.40, while the broader Topix index increased by 0.31%, closing at 2,775.51.

South Korea’s Kospi climbed 0.63% to finish at 2,626.81, and the small-cap Kosdaq rose 0.67% to 773.65.

In contrast, Mainland China’s CSI 300 Index declined by 0.88% amidst fluctuating trading conditions, closing at 3,912.78.

Hong Kong’s Hang Seng Index increased by 1.49%, finishing at 22,953.86, while the Hang Seng tech index experienced a rise of 2.39%, closing at 5,630.67, rebounding from previous session losses following Xi’s insights shared during a rare closed-door symposium.

Indian markets also experienced downward pressure, with the Nifty 50 dipped 0.28%, while the BSE Sensex index fell by 0.21% as of 1 p.m. local time.

— Amala Balakrishner

The upcoming minutes from the Federal Reserve’s recent meeting will be under close scrutiny this week, as investors look for insights into the timeline for rate adjustments, according to Bill Adams, chief economist at Comerica Bank.

Fed Chair Jerome Powell has consistently stated that the central bank is “not in a rush” to reduce interest rates; however, any clarity regarding future monetary policy is likely to be welcomed by market participants. Current market expectations suggest one or two quarter-point cuts by the year’s end, according to data from the CME Group.

— Sarah Min

Southwest Airlines announced it will cut its corporate workforce by 15% as part of a cost-saving strategy.

CEO Bob Jordan stated, “This unprecedented decision in our 53-year history underscores the challenges ahead and reaffirms our commitment to transforming Southwest Airlines into a more efficient and responsive organization.”

— Leslie Josephs