U.S. stock futures were higher on Tuesday after the S&P 500 and Dow Jones Industrial Average posted new record closes. Futures tied to the 30-stock Dow traded 56 points higher, or 0.1%. S&P 500 futures climbed 0.08%, and Nasdaq-100 futures advanced 0.1%. Wall Street is coming off a winning session, with the S&P 500 and Dow adding 0.3% and 0.2%, respectively. The Nasdaq gained 0.1%. The gains were modest but appeared to be a continuation of last week’s rally after the Federal Reserve cut interest rates by a half percentage point. The fed funds rate now sits at a range of 4.75% to 5%. Rate-sensitive sectors such as utilities and financials have moved higher in recent weeks in anticipation of the Fed’s cuts. There are now four sectors in the S&P 500 outperforming the market in 2024, compared to just two sectors back in July, according to Paul Hickey, co-founder of Bespoke Investment Group. “There’s been a lot moving underneath the surface. … You’ve seen the baton passed from these megacap stocks to the broader market,” Hickey said on CNBC’s “Closing Bell: Overtime” on Monday. While traders have cheered the outsized rate reduction, the market will likely experience heightened volatility over the coming weeks, according to Quincy Krosby, chief global strategist for LPL Financial. “Given how valuations have edged higher on the back of the market’s post Fed momentum, the market will be highly sensitive to any indication that the economy is softening at a faster pace,” she said. Traders will mull over fresh economic data on Tuesday, with the Conference Board’s consumer confidence reading for September due. The Richmond Fed manufacturing index for this month will also be out in the morning. U.S. Treasury yields were higher on Tuesday as market participants awaited fresh economic data and further comments from Federal Reserve officials. The yield on the 10-year Treasury was more than 4 basis points higher at 3.789%, while the 2-year Treasury yield rose 2 basis points to trade at 3.597%. Mainland China’s CSI 300 clocked its best day in over four years on Tuesday after Beijing announced a slew of policy easing measures in a rare briefing from central bank governor Pan Gongsheng. The index rose 4.33%, notching its best day since July 2020, to close at 3,351.9. Hong Kong’s Hang Seng index was up nearly 4% after the decision, also on track to see its best day in over seven months following the PBOC briefing. Australia’s S&P/ASX 200 fell 0.13% after the decision, closing at 8,142. Japan’s Nikkei 225 closed 0.57% higher at 37,940.59, while the Topix gained 0.54% to end at 2,656.73 as Japanese markets returned from a holiday. Earlier in the session, the Nikkei crossed the 38,000 mark for the first time since Sept. 3. South Korea’s Kospi rose 1.14% to close at 2,631.68, notching six straight days of gains, while the small-cap Kosdaq rose 1.62%, marking a seven-day winning streak and finishing at 767.35. Oil prices rose on Tuesday on news of monetary stimulus from top importer China and concerns that conflict in the Middle East could hit regional supply while another hurricane threatened supply in the United States, the world’s biggest crude producer. Brent crude futures were up $1.77, or 2.4%, at $75.67 a barrel by 7:25 am ET. U.S. WTI crude futures rose $1.83, or 2.6%, to $72.20. “The crude oil market has been looking desperately towards Chinese authorities for further easing measures to counter the economic slowdown,” said IG market analyst Tony Sycamore. Gold prices surged to a record high on Tuesday as a cocktail of factors, from hopes of further U.S. rate cuts and China stimulus measures to elevated Middle East tensions, lifted demand. Spot gold steadied at $2,625.25 per ounce after hitting a record high of $2,639.95 earlier in the day. U.S. gold futures were flat at $2,651.30.
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