On Tuesday, Wall Street’s primary indices moved forward as U.S. Treasury yields dropped, influenced by more accommodating statements from Federal Reserve policymakers overnight. However, there was a sense of caution due to increasing tensions in the Middle East.
The 10-year Treasury yield decreased from its 16-year high on Tuesday as trading resumed in the U.S. bond market following Columbus Day, also recognized as Indigenous Peoples’ Day.
Prominent Fed officials suggested that the rising yields on long-term U.S. Treasury bonds might affect the central bank’s decisions regarding further adjustments to its short-term policy rate.
Traders believe there’s an 86% chance that interest rates will stay the same in November and a 72% chance for December, as indicated by CME’s FedWatch tool.
Throughout the day, we’ll be paying attention to statements from several Fed officials, including Neel Kashkari from Minneapolis, Mary Daly from San Francisco, and Board Governor Christopher Waller.
As of 9:39 a.m. ET, the Dow Jones Industrial Average was up 38.01 points (0.11%) at 33,642.66, the S&P 500 was up 7.11 points (0.16%) at 4,342.77, and the Nasdaq Composite had gained 24.71 points (0.18%) to reach 13,508.95.
Among the major S&P 500 sectors, consumer staples and materials saw the most significant gains, while information technology and real estate sectors suffered losses.
In the Gaza Strip, Israel carried out intense airstrikes, destroying entire neighborhoods, even though Hamas militants had threatened to execute a hostage for every targeted home.
The Israeli embassy in Washington reported that more than 1,000 people had died in the weekend attacks by Hamas. On the other hand, Gaza’s health ministry stated that Israel’s retaliatory strikes had resulted in the deaths of at least 770 people.
Peter Cardillo, chief market economist at Spartan Capital Securities, mentioned, “If the conflict remains contained, I don’t expect it to have a significant impact… Investors will be closely watching this week’s inflation data and the start of banking earnings on Friday.”
Later this week, investors will pay attention to various inflation reports, including the September producer price and consumer price indexes, along with the release of the Federal Reserve’s September meeting minutes.
In the stock market, PepsiCo saw a 1.1% increase after the company raised its annual profit forecast for the third time this year. Rival company Coca-Cola also saw a 1.9% increase.
Truist Financial experienced a 5.5% gain following reports that the bank is in discussions to sell its insurance brokerage unit to the private equity firm Stone Point for approximately $10 billion.
Rivian Automotive had a 4% increase after UBS upgraded the stock of the electric vehicle maker from “neutral” to “buy.”
