Stock futures were little changed Tuesday, with traders set to close out a dismal month that saw Treasury yields surge to multiyear highs. Dow Jones Industrial Average futures was little changed. S&P 500 futures advanced 0.1%, and Nasdaq 100 futures were flat. Earnings season continued Tuesday, with Caterpillar reporting earnings for the third quarter that exceeded estimates. However, Caterpillar said its fourth-quarter revenue would only be “slightly” higher than the same quarter a year before, worrying investors it could miss analysts’ expectations. Shares were down more than 4% in premarket trading. The moves come after the S&P 500 on Monday climbed out of correction territory and posted its best day since late August. The Nasdaq Composite added about 1.2%, while the Dow jumped roughly 1.6% in its best day since early June. “I don’t quite trust [Monday’s rally] because I do think some of the fundamentals are starting to change,” Anastasia Amoroso, iCapital’s chief investment strategist, said on CNBC’s “Closing Bell: Overtime” on Monday. However, “coming into this week, we did hit some oversold levels,” she added. Corporate buybacks are likely to return as earnings season rolls on, Amoroso added, which could further justify a case for a bounce back. The major averages remain on pace to end the month in the red. The Dow and the S&P 500 are down 1.7% and 2.8% in October, respectively, in their third consecutive negative month. This marks the first three-month losing streak for both indexes since March 2020. The tech-heavy Nasdaq has declined more than 3% month to date, also on pace for its third negative month in a row. Wall Street is also keeping a close eye on the Fed’s next decision on interest rates this Wednesday. Fed funds futures pricing suggests a roughly 98% probability that the central bank will keep rates at current levels, according to the CME FedWatch Tool. “I actually expect that that might be a bullish development, because Fed Chair Powell sort of alluded to the case that the fact that Treasury yields rose across the curve means they might be done tightening,” said Amoroso. Investors are also hoping that October’s payrolls report, which will be released Friday, will indicate some slowdown in the labor market. U.S. Treasury yields declined on Tuesday as traders turned their eyes to Washington with the Federal Reserve set to kick off its policy meeting. At 7:13 a.m. ET, the yield on the 10-year Treasury was down by 4 basis points at 4.829%. The 2-year Treasury yield was trading more than 1 basis point lower at 5.025%. Japan stocks ended the session higher after the Bank of Japan’s monetary policy decision, while other Asia-Pacific markets fell as manufacturing activity unexpectedly contracted in China. The Bank of Japan left its short-term lending rate unchanged and said it has made its yield curve control policy more flexible. Elsewhere Tuesday, China manufacturing purchasing manager’s index data for October came in at 49.5 against a Reuters poll expectation of 50.2. A PMI reading below 50 signifies a contraction. Japan’s Nikkei 225 reversed earlier declines to end 0.53% higher at 30,858.85, while the Topix ended 1.01% up at 2,253.72. South Korea’s Kospi fell 1.41% to 2,277.99 and the Kosdaq dropped 2.78% to 736.10. Hong Kong’s Hang Seng index dropped 1.69% in its final hour of trade, while mainland China’s CSI 300 index shed 0.31% and snapped a five-day winning streak, ending at 3,572.5. In Australia, the S&P/ASX 200 ended the day up 0.12% at 6,780.7, rebounding off its year low. Oil prices edged up on Tuesday after a 3% fall in the previous session but were pinned below $90 a barrel after weak Chinese economic data offset concern about an escalation of the conflict in the Middle East. December Brent crude futures, were 91 cents, or 1.04%, higher at $88.36 a barrel ahead of their expiry later on Tuesday. The more heavily traded January contract climbed 83 cents, or 0.96%, to $87.18. U.S. West Texas Intermediate crude rose 82 cents, or 1%, to $83.13. Both Brent contracts traded $1 higher earlier in the day.
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