Stocks mostly flat but earnings a positive; gold drops 5%
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 16, 2025. REUTERS/Jeenah Moon
NEW YORK :Major stock indexes were mostly near flat on Tuesday, with upbeat results and forecasts from top U.S. companies providing some support, while gold prices dropped more than 5 per cent as investors took profits after a recent rally.
The yen fell to a one-week low after conservative Sanae Takaichi was elected as Japan's prime minister. Japan's Nikkei share gauge closed at a record high on Tuesday.
Spot gold fell 5.31 per cent to $4,123.85 an ounce, and had its steepest daily percentage fall since August 2020. Prices scaled an all-time peak of $4,381.21 on Monday and have gained about 60 per cent this year.
U.S. President Donald Trump said he expected to reach a fair trade deal with Chinese President Xi Jinping when the two meet next week in South Korea, and played down the risks of a clash over the issue of Taiwan.
The prospect of a resolution also helped bolster investor sentiment, along with a deal between Australia and the United States for the supply of rare earths minerals.
In earnings, GM shares jumped after the company raised its full-year forecast, and Coca-Cola gained after the company posted results that beat analysts' estimates.
But the S&P 500 technology sector was down 0.2 per cent, and Michael Green, chief strategist at Simplify Asset Management in Philadelphia, said the reaction to some earnings surprises was modest.
"The earnings are better than expected as companies continue to gain slightly in terms of margins, which suggests that (companies) have to be passing through the tariffs or pushing the tariffs back onto the importers," Green said.
The Dow Jones Industrial Average rose 218.16 points, or 0.47 per cent, to 46,924.74, the S&P 500 rose 0.22 points, essentially flat, to 6,735.35 and the Nasdaq Composite fell 36.88 points, or 0.16 per cent, to 22,953.67.
MSCI's gauge of stocks across the globe fell 0.84 points, or 0.08 per cent, to 994.85.
The pan-European STOXX 600 index rose 0.21 per cent.
Against the Japanese yen, the dollar strengthened 0.81 per cent to 151.96.
Takaichi became Japan's first female prime minister and leader of its ruling Liberal Democratic Party on Tuesday.
Traders bet that Takaichi's government could muddy the interest rate outlook and bring about greater fiscal spending.
The dollar also rose against other currencies. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was 0.35 per cent higher at 98.95, with the euro down 0.33 per cent at $1.1602.
U.S. Treasury yields eased as investors looked ahead to the Federal Reserve's next moves.
The Fed could deliver as many as three rate cuts in the next six months based on market-based expectations, while the European Central Bank, which meets next week, is not expected to deliver a rate cut any time soon.
The yield on benchmark U.S. 10-year notes fell 2.9 basis points to 3.959 per cent, from 3.988 per cent late on Monday.
Investor confidence was hit hard last week as a clutch of bad loans at U.S. regional banks ignited concern over credit risks that threatened to spill into the broader markets. The prolonged U.S. government shutdown also weighed on risk assets.
Oil prices ended higher. Brent crude futures rose 31 cents, or 0.5 per cent, to settle at $61.32 a barrel, while U.S. West Texas Intermediate crude futures for November delivery, which expired on Tuesday's settlement, closed up 30 cents, or 0.5 per cent, at $57.82.
