U.S. stocks surged Tuesday on the back of stronger-than-expected corporate earnings, but bleak forecasts on global economic growth pushed up bond yields and drove down oil.
The tech-heavy Nasdaq led the way for gains in U.S. markets, as many corporations began to report earnings stronger than expected. Those reports helped investors shake off warnings from global forecasters of a slowdown in economic growth, which weighed on other sectors like bonds and oil.
Of the 49 companies in the S&P 500 that had reported quarterly earnings as of Tuesday, nearly 80 percent topped profit estimates, per Refinitiv data.
The Dow Jones Industrial Average rose 1.45 percent, the S&P 500 gained 1.61 percent and the Nasdaq Composite jumped 2.15 percent.
The MSCI world equity index, which tracks shares in 45 nations, was up by 0.81 percent.
The surge came even as global economic bodies began to air warnings on economic growth. Both the World Bank and the International Monetary Fund (IMF) slashed their global economic outlooks for 2022 by nearly a full percentage point.
Oil prices plunged Tuesday as the IMF sharply downgraded its 2022 global growth forecast to 3.6 percent, 0.8 percentage points lower than its previous estimate released in January.
Energy prices are surging, debt levels are rising and shortages remain acute, the IMF noted, as multiple crises including the Ukraine crisis and the COVID-19 pandemic fuel inflation.
"The economic effects of the war are spreading far and wide – like seismic waves that emanate from the epicenter of an earthquake," IMF chief economist Pierre-Olivier Gourinchas said in the report.
Brent crude was down 5.35 percent, at $107.11 a barrel. U.S. crude was down 5.34 percent, at $102.43 per barrel.
The current battle by central banks worldwide to curb inflation continued to boost bond markets, where U.S. Treasury yields continued to move upward.
The Federal Reserve looks set to raise its interest rate by 50 basis points when it meets next month and a 75 basis-point hike has not been ruled out as Fed officials scramble to curtail inflation.
The benchmark 10-year Treasury yield was last at 2.942 percent, down slightly after hitting its highest levels in three years.
The dollar index rose above 101 for the first time since March 2020, as the greenback hit a 20-year high against the yen and tested a two-year peak on the euro. The index was last up 0.2 percent to 100.986.
Gold prices were lower after coming close to reaching $2,000 an ounce during Monday's session. Spot gold fell to $1,948.31 an ounce, down 1.52 percent for the day.