Last Updated 4:05 PM EST
Stock indices finished Tuesday’s trading session in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 increased by 2.8%, 3.06%, and 3.14%, respectively.
The consumer staples sector was the session’s laggard, as it gained 1.53%. Conversely, the energy sector (XLE) was the session’s leader, with a gain of 4.34% as a result of crude oil’s rally.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.637%, a decrease of 0.6 basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.113%. This brings the spread between them to -47.6 basis points. The negative spread indicates that investors still have fears of a recession.
Compared to yesterday, the market is pricing in a higher chance of a higher Fed Funds rate for the end of the year. In fact, the market’s expectations for a rate in the range of 4% to 4.25% is 33.7%, which is down from yesterday’s expectations of 41.4%. In addition, the market is now also assigning a 66.1% probability to a range of 4.25% to 4.5%. For reference, investors had assigned a 56.8% chance yesterday.
Stocks Remain Positive Heading into the Close
Last Updated 3:10 PM EST
Stocks are in the green heading into today’s close. As of 3:10 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 2.4%, 2.7%, and 2.8%, respectively.
In addition, WTI crude oil is also up to $86.21 as it continues to build on the recent momentum caused by potential cuts in oil production. The commodity’s overall downtrend over the past few months has led to lower gas prices across the country. However, prices at the pump appear to be reversing to the upside as WTI continues to rally.
Indeed, the national average for regular gas was last $3.805 per gallon, up from yesterday’s reading of $3.799. Still, this is significantly lower than the all-time high of $5.016 per gallon on June 14.
The highest prices can be found in California, where prices are substantially higher than the national average, at $6.412 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $3.096 per gallon.
It’ll be interesting to see if the overall downward trend will continue going forward as the Federal Reserve looks to raise interest rates to fight inflation, while oil producers lower production in order to maintain the price.
Stocks Rally as Factory Orders Remain Flat
Last Updated 12:15 PM EST
Stocks are positive halfway into Tuesday’s trading session. As of 12:15 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 2.6%, 2.9%, and 3.1%, respectively.
The consumer staples sector remains the laggard so far, as it is up 1.3%. Conversely, the basic materials sector (XLB) has overtaken the consumer discretionary sector as the session’s leader, with a gain of 3.6%.
On Tuesday, the U.S. Census Bureau released its monthly report for U.S. Factory Orders, which measures the month-over-month change in new orders placed with manufacturers. For the month of August, new orders were flat at 0%, lower than the expected 0.2%. This comes after last month’s report indicated a decline of 1%.
It’s worth noting that this indicator is based on data from August, making it a lagging indicator. Indeed, the Institute for Supply Management released its Manufacturing New Orders Index yesterday for September, which showed a contraction. Therefore, the U.S. Census Bureau’s Factory Orders report next month could also see a decline.
Stocks Rise as Job Openings Fall
Last updated at 10:02 AM EST
Stocks are in the green to start today’s trading session. As of 10:02 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 2.6%, 2.8%, and 3.2%, respectively.
The consumer staples sector (XLP) is the laggard so far, as it is up 1.8%. Conversely, the consumer discretionary sector (XLY) is the session’s leader, with a gain of 3.7%. In addition, WTI crude oil continues to rally, as it is hovering around $85.17 per barrel.
U.S. Treasury yields declined again today with the 10-Year yield down to 3.568%, a decline of 7.5 basis points. The Two-Year yield appears to be mirroring this move as it is also down by 7.5 basis points to 4.043%.
On Tuesday, the Bureau of Labor Statistics released its JOLTS Job Openings report, which helps measure job vacancies in the U.S. The number came in at 10.053 million job openings for August, below the expected 10.775 million.
It looks like the Federal Reserve’s rate hikes are beginning to work, as this equates to a drop of over 1 million job openings from the previous month. In addition, this also represents the first year-over-year decline since February 2021, which was the last year-over-year comparison of the post-pandemic world to the pre-pandemic one.
In addition, it’s important to remember that this data is for August, thus, making it a lagging indicator. Since then, many companies have announced that they will reduce their workforce in order to cut costs. With the central bank determined to continue raising rates, it’s likely that job openings will continue to decline.
Pre-Market Updates
Last updated at 8:46 AM EST
Stock futures continued to be up on Tuesday with the Dow Jones Industrial Average (DJIA) up 1.3%, while the S&P 500 (SPX) and the Nasdaq 100 (NDX) climbed 1.5% and 1.8%, respectively, as of 8:46 a.m. EST.
Last updated at 5:34 AM EST
Stock futures are moving higher in the early hours of Tuesday morning following a strong start to October on the previous day.
Futures on the Dow Jones Industrial Average (DJIA) jumped 1.02%, while those on the S&P 500 (SPX) and the tech-heavy Nasdaq 100 (NDX) were up 1.25% and 1.65%, respectively, as of 5.25 a.m. EST, Tuesday.
All three U.S. stock indexes bounced back strongly on October’s first trading day after a brutal September. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 shot up by 2.7%, 2.6%, and 2.4%, respectively, on Monday.
Monday’s rebound in the stock market was supported by a fall in bond yields, with the yield on the 10-year U.S. Treasury note moving down by about 18 basis points to around 3.65%. The yield on 10-year Treasury had exceeded 4% at one point last week.
Meanwhile, the U.S. West Texas Intermediate crude was up 0.54% at the time of writing after gaining over 5% in the previous session. Monday’s sharp rally in the benchmark was driven by the expectations that the OPEC+ might reduce production by over 1 million barrels a day to bolster oil prices. Demand concerns amid fears of an impending recession have dragged down oil prices from their June highs.
All eyes will be on the Bureau of Labor Statistics’ August Job Openings and Labor Turnover Survey, scheduled to be released today. Last month, the Bureau reported 11.24 million job openings for July, which easily exceeded estimates.
Key Company Updates
Shares of EV maker Rivian (RIVN) are trending higher as investors cheered the company’s Q3 update. In contrast, Tesla (TSLA) shares plunged 8.6% on Monday in reaction to lower-than-anticipated Q3 deliveries. Rivian delivered 6,584 vehicles and produced 7,363 vehicles in Q3. The company reaffirmed that it is on track to meet its full-year production guidance of 25,000 vehicles.
In another major update, South Korean e-commerce company Naver Corp is acquiring U.S. fashion resale platform Poshmark (POSH) in a deal valued at $1.2 billion.
Meanwhile, there are growing concerns that the upcoming earnings season might reflect the impact of soaring inflation and macro challenges, and could involve guidance cuts by several companies. As per Factset, the estimated earnings growth rate for the S&P 500 for Q3 2022 is 2.9%. If this estimate turns out to be accurate, it will mark the S&P 500’s lowest earnings growth rate since the third quarter of 2020.
