Stock Market Today: Stocks Rally as Treasury Yields Fall

Last Updated 4:03 PM EST

Stock indices finished today’s trading session in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 gained 0.17%, 0.88%, and 1.45%, respectively.

The materials sector was the session’s laggard, as it lost 0.16%. Conversely, the communications sector was the session’s leader, with a gain of 1.45%.

Furthermore, the U.S. 10-Year Treasury yield decreased to 3.78%, a decrease of more than seven basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.35%. This brings the spread between them to -57 basis points.

Compared to yesterday, the market is pricing in a higher chance of a lower Fed Funds rate for the end of the year. In fact, the market’s expectations for a rate in the range of 4.25% to 4.5% increased to 85.4% compared to yesterday’s expectations of 80.6%.

In addition, the market is now also assigning a 14.6% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 19.4% chance yesterday.

Last Updated at 3:00PM EST

Stock indices remain green heading into the final hour of today’s trading session. As of 3:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.3%, 1%, and 1.6%, respectively.

In addition, WTI crude oil remains under $90 per share, as it hovers around the mid-$86 per barrel range. The commodity’s overall downtrend has caused prices at the pump to decline when compared to last week.

Indeed, the national average for regular gas was last $3.759 per gallon, down from last week’s reading of $3.804. 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 $5.423 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $3.099 per gallon.

It’ll be interesting to see if this 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; Empire State Manufacturing Index Improves

Last Updated 12:00PM EST

Stocks are in the green halfway into today’s trading session. As of 12:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.7%, 1.5%, and 2.5%, respectively.

Earlier today, the Federal Reserve Bank of New York released its monthly Empire State Manufacturing Index report, which measures the general business conditions in New York state. The index is based on a survey of 200 manufacturers, where a reading above zero indicates improving conditions while a figure below zero indicates the opposite.

Today’s number came in at 4.5, which beat expectations of -5, which breaks a three-month decline. Overall, there hasn’t really been an established trend over the past 12 months, as results have been very choppy.

Nevertheless, today’s result, along with the better-than-expected PPI print, appear to be giving investors some hope that economic conditions may improve from this point on.

Stocks Rally as PPI Beats Expectations

Last Updated 9:47AM EST

Stock indices are in the green to start today’s trading session. As of 9:47 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.9%, 1.4%, and 2.2%, respectively.

WTI crude oil continues to slide as it falls below $85 per barrel. Meanwhile, bond yields are lower to start the day, as the U.S. 10-Year Treasury yield is now hovering around 3.82%. This represents a decrease of more than three basis points from the previous close. Similar movements can be seen with the Two-Year yield, which is now at 4.36%.

On Tuesday, even more evidence of softening inflation was released in the form of the U.S. Producer Price Index (PPI), which measures the change in the price of goods sold by manufacturers. The report came in at 0.2% month-over-month, better than the expected figure of 0.4%. Year-over-year, the increase was 8% compared to the 8.3% that was expected.

Similar results were seen with core PPI, which remained flat month-over-month versus the forecast of 0.3%. Year-over-year, it increased by 6.7% instead of the 7.2% economists were looking for.

Futures Rise Ahead of Key Retail Earnings, PPI Report

First Published 6:30AM EST

Stock futures were higher Tuesday morning as investors mulled over the mixed comments from two Fed leaders on Monday, and looked forward to key economic data and earnings.

Futures on the Dow Jones Industrial Average (DJIA) gained 0.31%, while those on the S&P 500 (SPX) jumped 0.69%, as of 6.30 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) futures climbed 1.14%.

Recession Fears Remain Rife, Despite Lower Inflation Data

On Monday, Fed representative Lael Brainard hinted at the possibility of the central bank easing its stance on inflation. On the same day, however, another Fed leader, Chris Waller, called on the market to prepare for higher interest rates.

The announcements sparked a sell-off which left the S&P 500, the Dow, and the Nasdaq 100 to drop 0.89%, 0.63%, and 0.98%, respectively, at Monday’s market close.

Importantly, the U.S. Treasury yield curve which had inverted earlier this year, remains inverted (in which long-term interest rates are lower than short-term ones). This is a matter of concern as historically, an event of the yield curve inversion has been followed by a recession. This is also something that investors are keeping track of and worrying about.

Other Market Updates

Meanwhile, Taiwan Semiconductor (NYSE:TSM), Louisiana-Pacific (NYSE:LPX), and Paramount (NASDAQ:PARA) shares popped after insider Warren Buffet’s Berkshire Hathaway bought shares in the companies.

Market sentiments dropped after Amazon (NASDAQ:AMZN) announced its plans to lay off about 10,000 employees this week.

The Producer Price Index report for October is due for release on Tuesday, giving us more clarity on the situation of wholesale prices. Moreover, investor attention is also likely to be on the Fed Governor Lisa Cook and a few other leaders from the central bank who are expected to speak this week.

Additionally, retail earnings from Walmart (NYSE:WMT) and Home Depot (NYSE:HD) due out on Wednesday. Also, Target (NYSE:TGT), Lowe’s (NYSE:LOW), Bath and Body Works (NYSE:BBWI), Macy’s (NYSE:M), and Kohl’s (NYSE:KSS) are among retailers who post earnings later this week.

Retail earnings will help investors understand consumer spending behavior during inflationary and pre-recessionary times.

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