The major index futures are indicating a nearly unchanged start on Tuesday, suggesting that stocks may exhibit limited movement after the significant gains observed in the last two sessions. Market participants might pause for reflection after the recent upswing, which has propelled the major indices closer to their all-time peaks. Despite a promising beginning to the corporate earnings season, traders might hesitate to pursue further stock purchases due to persistent worries regarding U.S.-China trade tensions and the ongoing government shutdown. The absence of significant U.S. economic data, partly attributed to the shutdown, may lead to some traders remaining inactive as they await the upcoming release of the highly anticipated consumer price inflation data on Friday. The inflation data, amidst the indefinite delays of most other economic reports, could significantly influence the interest rate outlook prior to the Federal Reserve’s monetary policy meeting next week. At present, the Federal Reserve is anticipated to persist in reducing interest rates during its upcoming two meetings. Reports reveals a 97.8 percent probability of a quarter-point rate cut next week, alongside a 95.5 percent likelihood of an additional quarter-point rate cut in December.
In the realm of individual stocks, General Motors is experiencing a significant uptick in pre-market trading following the release of third quarter results that exceeded expectations, alongside an upward revision of its full-year guidance. Beverage giant Coca-Cola is experiencing notable pre-market strength following the release of third quarter results that surpassed analyst expectations on both revenue and earnings. Conversely, shares of Northrop Grumman could experience a decline following the defense company’s announcement of third quarter earnings that surpassed expectations, yet revenues fell short of projections. After the upward movement observed throughout last Friday’s session, stocks demonstrated a more pronounced increase during trading on Monday. The major averages experienced a significant uptick, approaching their record highs once again, with the Nasdaq increasing by 310.57 points, representing a 1.4 percent rise, reaching 22,990.53. The S&P 500 rose by 71.12 points, or 1.1 percent, to close at 6,735.13. Meanwhile, the Dow gained 515.97 points, also a 1.1 percent increase, finishing at 46,706.58.
Apple contributed significantly to the upward movement of the markets, with the tech giant experiencing a notable increase of 3.9 percent, reaching a new record closing high. The increase in Apple’s stock price followed Loop Capital’s decision to upgrade its rating from Hold to Buy, driven by robust demand for the iPhone 17 series. Positive sentiment may also have been influenced by remarks from Kevin Hassett, who indicated that the current government shutdown might conclude this week. Hassett stated that he anticipates moderate Democrats will collaborate with Republicans to resolve the government shutdown, which has now reached its 20th day. If Democrats persist in their refusal to approve a funding bill without the inclusion of an extension of enhanced Obamacare tax credits, Hassett suggested that the White House might resort to “stronger measures” to encourage their participation in negotiations. The recent surge on NYSE followed a report indicating that the Trump administration is subtly easing certain tariffs that form the foundation of the president’s key economic strategy, with exemptions and proposed exclusions for numerous products during trade negotiations.
Sector-wise, steel stocks exhibited a significant upward movement, propelling the NYSE Arca Steel Index higher by 3.5 percent, with Cleveland-Cliffs outperforming the sector, surging by 21.5 percent following the announcement of its intentions to explore the establishment of a rare earths mining operation. The notable increase in gold prices has led to a considerable rise in gold stocks, evidenced by the 3.0 percent jump in the NYSE Arca Gold Bugs Index. Airline, banking, oil service, and semiconductor stocks exhibited robust performances throughout the day, advancing in tandem with the majority of other significant sectors, highlighting broad-based optimism across the market.