Asian markets saw gains on Tuesday following a rally in U.S. stocks, driven by a reversal of last week's concerns about the Middle East conflict. Meanwhile, oil prices and U.S. futures experienced slight declines.
The upcoming release of China's latest economic growth data, scheduled for Wednesday, is of significant interest to the markets. Economists are predicting a drop in annual growth to below 5% in July-September, compared to 6.3% in the previous quarter, as reported by the Associated Press (AP).
A weakened Chinese economy can negatively impact regional and global trade and manufacturing, potentially slowing down the global recovery from the pandemic.
Notable market movements included a 1% increase in Tokyo's Nikkei 225, reaching 31,988.40, and a 0.7% rise in Hong Kong's Hang Seng, reaching 17,763.41. The Shanghai Composite index also saw a 0.3% gain, reaching 3,081.75. Additionally, Australia's S&P/ASX 200 climbed by 0.5% to 7,059.00, India's Sensex advanced by 0.5%, and Thailand's SET index rose by 0.5%.
For the moment, it appears that markets have rebounded.
On Monday, the S&P 500 experienced a 1.1% increase, marking its best performance since October 7, closing at 4,373.63. The Dow also rose by 0.9% to reach 33,984.54, while the Nasdaq composite added 1.2% to reach 13,567.98.
Robert Carnell and Nicholas Mapa of ING Economics commented that the recent "risk-off" tone in the markets seems to be dissipating, thanks to diplomatic efforts in the region, including those by U.S. Secretary of State Antony Blinken.
Oil prices have fluctuated after concerns about supply disruptions from Iran contributed to a volatile week.
Early on Tuesday, U.S. benchmark crude oil was down 18 cents at $86.48 per barrel in electronic trading on the New York Mercantile Exchange. On Monday, it fell $1.03 to settle at $86.66, following a rise from $70 during the summer to over $90 late last month.
Brent crude, the international standard, gave up 3 cents to $89.62 per barrel, following a $1.24 drop on Monday to $89.65 per barrel.
Gold decreased by $6 to settle at $1,928.30 per ounce.
On Tuesday, the yield on the 10-year Treasury was at 4.75%, up from 4.71% on Monday and from 4.62% late on Friday.
"Investors should remember that markets are very resilient, have endured countless wars, recessions, and depressions, and have rewarded long-term investors with a well-crafted financial plan," said Mark Hackett.
This week, more than 50 companies in the S&P 500 are set to report their earnings for the summer, including Bank of America, Johnson & Johnson, and Tesla. Investors are hopeful for a positive corporate profit reporting season.
Last week, several banks kicked off the reporting season with stronger results than anticipated. Charles Schwab saw a 4.7% rise in its shares after reporting better-than-expected profits for the third quarter.
Lululemon's shares surged by 10.3% in their first trading session after S&P Dow Jones Indices announced that the apparel company would be included in its widely tracked S&P 500 index, replacing Activision Blizzard, which was acquired by Microsoft.
Despite the Federal Reserve's introduction of higher interest rates to combat inflation, the U.S. economy has remained remarkably robust. Employers continue to add jobs, and U.S. households continue to spend, albeit with greater caution due to high inflation. Earnings per share at S&P 500 companies likely increased by 0.4% last quarter compared to the previous year, according to FactSet.