Stocks rise as oil slips with tech earnings, Fed ahead
Oct 27 : World stocks rose while oil prices slipped on Tuesday on hopes for Middle East talks and as investors awaited earnings from US technology giants and central bank meetings that could shape the near-term outlook for interest rates.
Oil trading was choppy as attention turned to the prospect of peace talks, although prices remained near multi-month highs as the Houthi-Saudi Arabia conflict rages and the potential for fresh US-Israeli attacks hangs over the market.
Iran's supreme leader and its security chief discussed the importance of pursuing Iran's interests and implementing its conditions with the aim of ending the war, state media reported. Diplomatic efforts were also under way, with representatives from Saudi Arabia, Turkey and Pakistan in Tehran.
"When interpreting developments in oil-producing regions, a lot of investors and traders understandably look to the oil markets," said Steve Sosnick, chief strategist at Interactive Brokers. He also cited the wait for a slew of key earnings reports and the Federal Reserve's policy statement after its meeting ends on Wednesday.
"With the Fed meeting tomorrow and several really large earnings tomorrow and Wednesday .. the market, without a ton of catalysts, is sort of meandering," said Sosnick.
Fed policymakers have telegraphed that they will not raise short-term borrowing costs again on Wednesday, but with inflation concerns still front and center, investors believe a pause in rate hikes will not last for long. Traders are pricing in an increase from the Fed in December.
Wall Street indexes had closed higher on Monday, with the S&P 500 and Nasdaq coming off consecutive weekly declines, as Anthropic's IPO filing helped boost sentiment in AI-related stocks.
After the initial positive reaction from the filing, investors turned their focus to reports due out this week from AI hyperscalers including Microsoft, Amazon and Alphabet as they hope for signs that their billion-dollar investments are yielding returns as expected.
Big Tech earnings could also influence appetites for the Anthropic IPO and Meta Platforms' $95 billion equity fundraising.
At 11:35 a.m. ET (1535 GMT) the Dow Jones Industrial Average was up 57.72 points, or 0.11 per cent, at 52,419.30, the S&P 500 rose 42.09 points, or 0.55 per cent, to 7,718.86 and the Nasdaq Composite was 257.46 points, or 0.98 per cent, higher at 26,425.66.
MSCI's gauge of stocks across the globe rose 6.18 points, or 0.55 per cent, to 1,129.34 while the pan-European STOXX 600 index rose 0.49 per cent.
CENTRAL BANKS EXPECTED TO STAY ON HOLD
Along with the Fed, the European Central Bank and the Bank of Japan are due to make policy decisions this week, with economists expecting all three to stand pat on interest rates, leaving the focus on comments from policymakers to gauge the rates outlook.
In currencies, the dollar nudged higher against the euro, Japanese yen and UK pound as traders braced for the central bank meetings as well as corporate earnings.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.21 per cent to 102.23, with the euro down 0.26 per cent at $1.1143.
Against the yen, the dollar strengthened 0.19 per cent to 157.8.
In fixed income, US Treasury yields edged higher with investors weighing the outlook for interest rate hikes ahead of Wednesday's Federal Reserve decision and awaiting results of Tuesday afternoon's 5-year note auction.
The yield on benchmark US 10-year notes rose 0.45 basis points to 4.991 per cent, from 4.986 per cent late on Monday, while the 30-year bond yield rose 0.72 basis point to 5.3082 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.35 basis points to 4.725 per cent.
In oil markets, US crude fell 1.6 per cent to $100.14 a barrel and Brent dropped to $113.86 per barrel, down 1.68 per cent on the day.
In precious metals, spot gold rose 1.01 per cent to $4,056.82 an ounce, while spot silver rose 0.85 per cent to $54.39 an ounce.
