Wall Street ends mostly higher as yields and oil retreat
US equity indexes closed mostly in positive territory on Tuesday, helped by softer oil prices and lower Treasury yields, according to the report. The blue-chip Dow gained 529.85 points, or 1.02%, to 52,495.88, while the S&P 500 added 21.84 points, or 0.28%, to 7,712.57. The Nasdaq Composite slipped 6.07 points, or 0.02%, to 26,424.82, and MSCI's global equity gauge edged up 0.42 points, or 0.04%, to 1,130.40.[S1][S2][S3]
3M shares shot up 5.8%, lifting the Dow, after the industrial conglomerate said it was broadening its data-center partnership with Amazon and raised its full-year profit forecast. After the closing bell, SpaceX shares rose when the company reported third-quarter revenue that more than doubled, topping estimates on growth in AI and Starlink; the stock had dipped 0.1% during the regular session. Netflix fell in after-hours trading after issuing a disappointing quarterly forecast, following a 1.7% decline in regular trading.[S1]
Meta, an AI heavyweight, was scheduled to report quarterly results on Wednesday. Investors are scrutinizing corporate earnings for signs that consumers and the wider economy are holding up and that heavy spending on artificial intelligence is producing returns. Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts, said investors were waiting on growth companies to report and that analysts had lifted their estimates, with attention on how far results clear that bar.[S1]
Rate expectations and the AI trade under scrutiny
Nervousness was visible in the 32% slide of South Korean AI infrastructure company Elice Group, whose stock fell below its initial public offering price on its market debut. Investors are also weighing the risk that higher interest rates pose to AI-related shares. The yield on the benchmark US 10-year Treasury note fell 1.5 basis points to 5.121% after touching 5.073% during the session, a retreat after recent increases driven by inflation worries.[S1]
According to CME FedWatch, the probability of a Federal Reserve rate increase of at least 25 basis points at next week's policy meeting stood at 17.2%, down from 22.1% a week earlier and 57.6% a month before. Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma, described a market comforted by lower rates and reduced oil volatility even as crude remains elevated, and said earnings season could either distract investors or give them reason to push shares higher.[S1]
French stocks fall as unrest tests the deficit fight
Overnight, French cities stayed quiet as curfews took effect following the previous weekend's disturbances, and activist groups said they would stage another round of rallies the coming Saturday. French equities slipped 0.38%, and the broader STOXX 600 across Europe lost 0.14%. Chipmakers in Europe, among them ASML and ASMI, also moved lower. The turmoil has underscored how hard it is for Paris to bring down its sizable budget shortfall.[S1]
French government bond yields climbed further as investors stayed cautious ahead of the planned protests. The 10-year OAT yield was up 3 basis points at 4.96% earlier, after reaching 4.9937% in early October, its highest since July 2002. The spread between OATs and Bunds widened by 5.5 basis points to 152.50 basis points. The euro rose 0.22% to $1.1235, though traders remained wary over the unrest, while the dollar index fell 0.25% to 101.71.[S1][S4]
Oil slips from a five-month high
Crude prices retreated after climbing to a five-month peak, with traders assessing talks between Iran's president and Pakistan's army chief, a central go-between for US-Iran contacts, alongside ongoing Houthi strikes on Saudi facilities that threaten supplies. Brent futures dropped 76 cents, or 0.69%, closing at $108.79, having earlier hit $111.99, the highest in five months. The November US West Texas Intermediate contract, which lapsed on Tuesday, ended $1.87 lower, or 1.8%, at $101.79.[S1]
