In a noteworthy surge on Tuesday, US stock futures experienced a substantial upswing, propelled chiefly by the unaltered status of the consumer price index (CPI) in October and a marked decline in bond yields. The Dow Jones Industrial Average (^DJI) led the charge with an impressive nearly 1% surge, while the S&P 500 (^GSPC) followed suit with a notable 1.2% increase. The Nasdaq 100 (^NDX), known for its tech-heavy components, also joined the upward momentum, registering a robust uptick of around 1.6%.
This bullish movement in the stock market was accompanied by a corresponding downturn in yields. The 10-year Treasury, in particular, witnessed a notable 11 basis points drop, settling at 4.51%. Simultaneously, the 30-year Treasury recorded a decline of almost 9 basis points, reaching a rate of 4.66%. These shifts in bond yields were reflective of the broader market sentiment and economic dynamics at play.
Contributing to this optimistic market sentiment was the favorable quarterly report from Home Depot (HD). The retail giant revealed a positive performance, showcasing a lower-than-anticipated decline in same-store sales. This unexpected resilience in Home Depot’s figures provided a ray of positivity, especially in anticipation of earnings reports from other retail giants such as Target (TGT) and Walmart (WMT) later in the week. Despite stable consumer spending amid borrowing costs, the growth trajectory of retail stocks has exhibited sporadic patterns, making Home Depot’s performance a notable highlight.
Amidst the financial developments, the impending meeting between President Joe Biden and Chinese President Xi Jinping took center stage. Scheduled for Wednesday at the Asia-Pacific Economic Cooperation (APAC) summit in San Francisco, the leaders are anticipated to engage in discussions aimed at reaching an agreement with China to curtail the production and export of fentanyl. Sources from Bloomberg suggest that this agreement, if achieved, could mark a significant diplomatic achievement in the ongoing efforts to address the opioid crisis.
In conclusion, the positive trajectory of U.S. stock futures on Tuesday was distinctly influenced by the October CPI presenting a milder-than-expected inflation scenario and the consequential shift in bond yields. As investors and analysts continue to monitor economic indicators and corporate earnings, the meeting between President Biden and President Xi Jinping emerges as a pivotal event with potential implications for international trade and cooperation.
Source: Yahoo Finance
