Dow rises 100 points, heads for first win in 7 sessions: Live updates

A recession could hit the U.S. economy early next year, according to Baupost Group chief executive officer Seth Klarman.

“The goal of the Fed is to reduce the heat in the economy, and one way to do that is to trigger some kind of recession,” Klarman told CNBC’s “Squawk Box” Tuesday. “It’s been slow developing, [and] some people think that the excess cash in people’s pockets will start to run out around year-end, so maybe it’s an early 2024 event”

— Brian Evans

The outlook from consumers brightened more than expected in June even with an expected recession on the horizon, The Conference Board reported Tuesday.

Consumer confidence for the month rose to an index value of 109.7, up from 102.5 in May and better than the Dow Jones estimate for 104. That was the highest reading since January 2022.

New questions focused on household finance showed 30% of families expecting their situations to improve in the next six months against just 14% seeing worsening conditions. The survey also showed a decline in those expecting a recession, though still at 69.3% from the 73.2% in May.

—Jeff Cox

New home sales rose more than expected in May despite stubbornly high mortgage rates, according to data Census Bureau data release Tuesday.

The data showed sales rise to a seasonally adjusted annual rate of 763,000, far exceeding the 675,000 estimate expected by economists polled by Dow Jones.

— Samantha Subin

Bank of America is standing by Disney even as the company faces some hurdles.

“We remain confident that Disney has the proper mix of IP, content library/rights, brand value, park expansion opportunities and leadership to manage through the present challenging environment and position the company for future growth,” wrote analyst Jessica Ehrlich in a Tuesday note to client.

Even as the company faces a range of “strategic issues,” including a murky path to profitability in its direct-to-consumer business and an uncertain succession plan, Ehrlich remains confident in Disney.

She added that Disney’s “best-in-class premiere assets” and that CEO Bob Iger’s “strong track record and deep industry relationships will steer the company in the right direction.”

The analyst lowered third-quarter EPS estimates to reflect some challenges within content sales and licensing, but retained her $135 price target. The price objective suggests that shares, up 2% this year, could rally more than 52% from Monday’s close.

— Samantha Subin

Home prices fell less than expected in April from a year ago and posted a monthly gain in another sign of a strengthening real estate market, according to a closely watched gauge released Tuesday.

The Case-Shiller index for the 20 largest housing markets in the U.S. saw a 1.7% annual price decline, compared to the Dow Jones estimate for a 2.4% decrease.

On a monthly basis, a national measure showed an increase of 1.3% while the 10- and 20-city indexes posted gains of 1.7%, according to non-seasonally adjusted numbers.

— Jeff Cox

Goldman Sachs recommends buying Kellogg as the food industry enters a tougher environment.

“K stands out as one of the few who will be able to sustain increasingly scarce growth given its favorable end-market exposure and strong business momentum,” analyst Jason English said. “Yet it is valued among the prospective laggards.”

Kellogg stock is down roughly 8% from January. Shares were 2.7% higher in premarket trading on Tuesday.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Demand for long-lasting goods such as televisions, appliances and transportation equipment unexpectedly jumped in May, the Commerce Department reported Tuesday.

Durable goods orders accelerated 1.7% for the month, faster than the 1.2% in April and far ahead of the Dow Jones estimate for a decline of 1%.

Even excluding transportation, the total rose 0.6%, and it increased 3% excluding a 14.7% plunge in defense orders.

— Jeff Cox

These are some of the stocks making the biggest moves before the bell:

Read the full list of stocks moving in the premarket here.

— Michelle Fox

Bernstein downgraded Alibaba shares on Tuesday over concerns tied to merchant crowding and low user growth.

“We upgraded Alibaba a year ago on the basis that the stock had discounted perpetual low growth, and that reopening would help support growth via better category mix. Alibaba’s shares have traded in a range since — but while they remain cheaply valued, perpetual low growth no longer feels like an aggressive bear case,” analyst Robin Zhu said.

Alibaba stock is down nearly 3% from January. Despite the downgrade, shares gained more than 1% before the bell.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Bernstein downgraded shares of Google-parent Alphabet on Monday, and noted concern over stiffer competition. It follows a downgrade from UBS a day earlier citing similar concerns.

“While the headlines are AI-focused, we see increasing competition from retail media, share-shift back to Meta, and yes, some Gen AI pressure capping near-term search growth,” analyst Mark Shmulik wrote.

Alphabet stock has climbed more than 31% from the start of the year. Shares fell nearly 1% before the bell.

CNBC Pro subscribers can read the full story here.

— Brian Evans

— Sarah Min

Shares of Delta Air Lines rose 1% before the bell after the company lifted its guidance for the second quarter as travel demand continues to boom.

The airline said it now expects earnings per share to range between $2.25 and $2.50, up from previous guidance of $2 to $2.25 a share.

Delta also said that revenue for the period should rise 17% to 18% over the previous year, and that it expects full-year adjusted earnings to come in near the top end of its range.

Walgreens shares dropped more than 6% after the pharmacy giant posted weaker-than-expected quarterly earnings and slashed its full-year profit guidance.

The company now sees earnings ranging between $4 per share to $4.05 per share for the full year. That’s down from a previous forecast of $4.45 to $4.65.

— Fred Imbert

U.S. Treasury yields rose on Tuesday as investors looked to key data for hints about the state of the economy and considered the implications this could have for Federal Reserve monetary policy.

At 4 a.m. ET the 10-year Treasury yield was trading at 3.7348% after rising by over one basis point. The 2-year Treasury was last up by more than two basis points to 4.6933%.

Yields and prices move in opposite directions and one basis point equals 0.01%.

— Sophie Kiderlin