U.S. stocks drifted between small gains and losses Tuesday as investors assessed corporate earnings and grappled with concerns over how the global economy will withstand the delta variant of the coronavirus as well as Chinese regulatory action.

What are major indexes doing?

The Dow Jones Industrial Average
DJIA,
+0.12%

rose 46.83 points, or 0.1%, to 34,884.99.

The S&P 500
SPX,
-0.09%

ticked up 3.70 points, or 0.1%, to 4,390.86.

The Nasdaq Composite
COMP,
-0.55%

was down 34.43 points, or 0.2%, at 14,646.64.

U.S. stocks couldn’t hold early gains on Monday with the Dow Jones Industrial Average and the S&P 500 both ending lower, while the tech-heavy Nasdaq Composite squeaked out a slight gain. The combined volume on the New York Stock Exchange and Nasdaq was the seventh lowest of the year

What’s driving the market?

Mask mandates have been reintroduced in various U.S. regions including Louisiana and San Francisco to confront the delta strain of coronavirus after the seven-day average of new coronavirus cases surpassed the peak seen last summer, according to the CDC Director Dr. Rochelle Walensky. However, the U.S. did achieve the 70% vaccination target set by President Joe Biden on Monday. Meanwhile, China announced fresh mass testing in Wuhan, the city where the disease was first discovered.

“The delta variant has emerged as a credible downside risk to market performance, but one that we expect to slow, not derail, the recovery,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments, in a note.

“Consumers have learned to live with the virus, and the widespread availability of vaccines makes renewed shutdowns politically difficult. Consumers will continue to rely on healthier finances and excess savings to fuel strong spending this year,” she said.

U.S. factory orders rose 1.5% in June on stronger demand for airplanes, oil and other industrial goods, in data published Tuesday, but more recent data published Monday showed a weaker-than-expected reading on July U.S. manufacturing activity from the Institute for Supply Management.

U.S. Treasury yields edged lower again Tuesday, and analysts said concerns over peaking economic growth could remain a concern.

With that in mind, Friday’s July jobs report could attract “special attention,” said Charalambos Pissouros, head of research at JFD Group, in a note, as it pertains to the Federal Reserve’s path toward tapering its monthly asset purchases.

If expectations for strong numbers are met, it could undermine Fed Chairman Jerome Powell’s assertion last week that the jobs market had a long way to go before meeting the central bank’s goals, Piossouros said, potentially reviving speculation over early tapering.

“The U.S. dollar could rebound on a strong employment report, but equities could pull back, as earlier QE tapering could mean earlier rate hikes as well,” the analyst said.

Investors also continue to wade through corporate earnings reports. As of last Friday, 88% of S&P 500 index companies had reported beating earnings estimates for the second quarter, the highest percentage since FactSet began tracking this data in 2008.

“The continued healthy earnings outlook is a key driver of our view that the equity bull market remains on solid footing,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, in a note.

“The outlook is further supported by a still-accommodative Fed and the fact that stocks look quite attractive relative to very low yielding bonds,” she said.

Which companies are in focus?

Shares of PepsiCo Inc.
PEP,
+0.13%

rose 0.5%, after the beverage and snacks company announced an agreement to sell Tropicana, Naked and other juice brands across North America for $3.3 billion in cash to PAI Partners.

Alibaba Group Holding Ltd.
BABA,
-2.00%

topped earnings estimates Tuesday but fell slightly short of revenue expectations, while also announcing a boost to its buyback program. U.S.-listed shares fell 2.8%.

Shares of Eli Lilly & Co.
LLY,
+4.04%

were up 3.9% after the drugmaker missed second-quarter profit expectations while revenue beat, as gross margin as a percentage of revenue fell due primarily to an excess inventory charge related to COVID-19 antibodies.

Clorox Co.
CLX,
-11.55%

shares dropped 11% after the consumer goods company missed estimates for its fiscal fourth quarter and said it expects earnings and margins to shrink again in fiscal 2022.

Shares of Under Armour Inc.
UA,
+5.77%

rose 4.6% after the athletic company reported second-quarter earnings that far exceeded expectations and raised its 2021 guidance.

Chemicals giant DuPont
DD,
-1.45%

lifted its earnings guidance for the year. Shares fell 1.9%.

Mall operator Simon Property Group SPG late Monday raised its full-year guidance and lifted its dividend payment after reporting 92% occupancy. Shares rose 2.1%.

Office-building owner Vornado Realty Trust VNO met second-quarter estimates and reported a 97% rent collection rate. Shares were down 3.5%.

Outdoor clothing maker Columbia Sportswear COLM lifted its sales guidance. Shares advanced 3.1%.

Videogames maker Take-Two Interactive TTWO guided toward a weaker current quarter than analysts expected. Shares dropped 9%.

Shares of Nikola Corp.
NKLA,
-7.08%

were down 6%, after the battery-electric and hydrogen-electric vehicle and components maker reported a narrower-than-expected second-quarter loss.

Chinese videogames makers, including Tencent HK:700, tumbled in Hong Kong trade after a report suggested authorities would take action against them.

What are other markets doing?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.169%

edged down 0.8 basis point to 1.163%. Yields and debt prices move in opposite directions.

The ICE U.S. Dollar Index
DXY,
+0.08%
,
a measure of the currency against a basket of six major rivals, was flat.

Oil futures were under pressure after a Monday tumble, with the U.S. benchmark
CL00,
-1.29%

down 1.4%. Gold futures
GC00,
-0.56%

also weakened, down 0.5%.

In European equities, the Stoxx Europe 600
SXXP,
+0.29%

and London’s FTSE 100
UKX,
+0.48%

were both up 0.2%.

In Asia, the Shanghai Composite
SHCOMP,
-0.47%

fell 0.5%, while the Hang Seng Index
HSI,
-0.16%

edged down 0.2% in Hong Kong and Japan’s Nikkei 225
NIK,
-0.50%

declined 0.5%.

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