US Market
The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to add to the gains posted in the previous session.
Early buying interest may be generated in reaction to a pullback by treasury yields, as activity in the bond market has been a key driver of trading on Wall Street in recent sessions.
The yield on the benchmark ten-year note is giving back ground after reaching its highest intraday level in over sixteen years last Friday.
After staying weak till about an hour past noon, U.S. stocks recovered and climbed higher on Monday and eventually ended the day’s session on a fairly firm note.
Rising geopolitical crisis in the Middle East hurt sentiment and set up a weak start for the market, and stocks mostly struggled till noon. However, the mood turned a bit positive thereafter as worries about interest rates eased after Federal Reserve Vice Chair Philip Jefferson said the central bank needs to “proceed carefully to balance the risk of tightening too much.
Energy stocks gained as oil prices surged amid concerns about potential disruptions in supply due to the conflict in the Middle East.
The major averages all ended higher. The Dow settled with a gain of 197.07 points or 0.59 percent at 33,604.65.
The S&P 500 ended higher by 27.16 points or 0.63 percent at 4,335.66, while the Nasdaq ended with a gain of 52.90 points or 0.39 percent at 13,484.24.
The mood was cautious with investors awaiting the inflation data, due later in the week.
The inflation data could have a significant impact on the outlook for interest rates amid recent concerns the Federal Reserve will keep rates at an elevated level longer than previously anticipated.
Airline stocks ended sharply lower, weighed down by the conflict in the Middle East, and higher oil prices. Energy stocks gained, while biotechnology stocks drifted lower.
Northrop Grumman soared 11 percent. Marathon Oil, CF Industries, Conoco Philips, Axon Enterprise, Exxon Mobil, Baker Hughes, Universal Health Services, Textron and Chevron gained 2.7 to 6.5 percent.
United Airlines Holdings, Delta Airlines, Carnival, Solaredge Technologies and American Airlines ended lower by 4 to 5 percent.
Southwest Airlines, Moderna, Alaska Air, Nvidia, General Electric and Tesla were among the other losers in the session.
U.S. Economic Reports
The Commerce Department is due to release its report on wholesale inventories in the month of August at 10 am ET. Wholesale inventories are expected to edge down by 0.1 percent.
At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $46 billion worth of three-year notes.
Europe
European stocks rallied on Tuesday and bond yields retreated after Federal Reserve officials indicated that the series of interest rate rises in the U.S. may be at an end.
Closer home, ECB policymaker Francois Villeroy de Galhau said in an interview to Francois Villeroy de Galhau that inflation should still land at the target level of around 2 percent by the end of 2025 despite the violence that has flared up in Israel since Saturday.
Meanwhile, on a light day on the economic front, data showed British grocery inflation fell for a seventh month in a row to the lowest rate in more than a year heading into October.
The pan European STOXXX 600 was up 1.5 percent at 450.24 after declining 0.3 percent on Monday.
The German DAX jumped 1.6 percent, while France’s CAC 40 and the U.K.’s FTSE 100 both added around 1.4 percent.
Eutelsat Group shares soared over 7 percent in Paris. The satellite communications company and Marlink, a hybrid networks provider, have signed a multi-year multi-million agreement for Maritime Connectivity over Europe, the Middle East, and Africa or EMEA.
Euroapi plunged 57 percent after the pharmaceutical company cut its 2023 sales guidance.
Elis SA surged 4.3 percent after Brazil-based asset manager BWGI said it would acquire a 6 percent stake in the French cleaning services company.
British polling company YouGov soared 20 percent after reporting a sharp rise in pretax profit for fiscal 2023 on improved revenue.
Electricals retailer Currys climbed nearly 3 percent after announcing it has received several non-binding offers from potential buyers for its business in Greece and Cyprus, Kotsovolos.
Croda International was up 2.9 percent after several brokerages raised their target price on the stock.
Kontron AG, a maker of computer hardware and other technology products, jumped 6.4 percent after it has secured two design wins valued around 100 million euros from undisclosed parties.
Rheinmetall AG, an aerospace and defense company, added nearly 2 percent after it announced a further order from German Bundeswehr to supply over 150,000 rounds of artillery ammunition under a framework agreement.
Asia
Asian stocks ended mostly higher on Tuesday as oil prices slipped following the previous session’s strong rally, and the dollar and bond yields retreated on Fed rate pause hopes.
Top Fed officials indicated on Monday that rising bond yields and the resultant tightening of financial conditions might prompt the U.S. central bank to stand pat on interest rates until year-end.
A cautious undertone prevailed, however, as violence escalated between Israel and Gaza. Both sides have suffered heavy casualties, prompting urgent humanitarian needs.
Chinese markets bucked the regional trend, with the benchmark Shanghai Composite index falling 0.70 percent to 3,075.24 after debt-saddled property developer Country Garden failed to make an international debt payment and warned it might not meet all offshore payment obligations in time.
Hong Kong’s Hang Seng index jumped 0.84 percent to 17,664.73 after witnessing a shortened trading session on Monday due to a typhoon warning. Country Garden shares plunged 8.3 percent.
Japanese shares posted strong gains as trading resumed after a long holiday weekend. The Nikkei average jumped 2.43 percent to 31,746.53, marking its largest single-day gain in nine months, led by energy explorers and refiners. The broader Topix index settled 2.12 percent higher at 2,312.19.
South Korean shares ended slightly lower on heavy foreign and retail selling. The Kospi average slipped 0.26 percent to 2,402.58 as Finance Minister Choo Kyung-ho called for thorough monitoring and economic contingency plans to minimize the impact of the Israel-Hamas war on the South Korean economy.
Australian markets jumped the most in four weeks as energy stocks rallied after a surge in crude oil prices on supply concerns.
Origin Energy soared 5.5 percent after the competition watchdog approved Brookfield Corp’s takeover of the power producer.
The benchmark S&P/ASX 200 index climbed 1.01 percent to 7,040.60, extending gains for a fourth straight session and touching its highest level since Sept. 29. The broader All Ordinaries index closed up 1.03 percent at 7,231.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 0.79 percent to 11,293.38, logging its biggest intra-day percentage gain since Sept. 29.
Commodities
Crude oil futures are slipping $0.21 to $86.17 a barrel after soaring $3.59 to $86.38 on Monday. Meanwhile, after climbing $19.10 to $1,864.30 an ounce in the previous session, gold futures are inching up $4.90 to $1,869.20 an ounce.
On the currency front, the U.S. dollar is trading at 148.98 yen compared to the 148.51 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0586 compared to yesterday’s $1.0567.