The American markets closed higher on Tuesday as investors returned to the market after a dramatic sell-off the day before. Recent comments from officials at the Federal Reserve eased concerns about a US recession. Federal Reserve policymakers have dismissed the idea that weaker-than-expected job numbers for July mean the economy is heading towards a recession, but they have also warned that the Federal Reserve will need to cut rates to avoid such an outcome. The broad S&P 500 index and tech-heavy Nasdaq closed the day up 1.0 percent, while the Dow Jones Industrial Average rose 0.8 percent.
Commodities rose across the board on Tuesday. Oil prices rose on Tuesday, recovering from multi-month lows reached in the previous session. The price change was driven by investors turning their attention to supply tightening and financial markets recovering from their recent fall. Iran’s threat of retaliation against Israel and the US after the killing of two militant leaders has increased concerns that a major war could break out in the Middle East, which could have a direct impact on supply from the region. Recent reductions in crude oil and fuel inventories at major trading hubs also supported oil prices. WTI crude oil rose by $0.4 to $73.4 per barrel, and Brent crude increased by $0.3 to $76.6 per barrel.
Base metals performed positively yesterday, with zinc being the only loser, falling by 1.1 percent. Lead increased by 0.2 percent, followed by copper, which rose by 0.8 percent. Tin climbed by 1.0 percent, while aluminum and nickel advanced by 1.7 percent and 1.5 percent, respectively. Gold prices fell on Tuesday due to a stronger dollar and higher bond yields, despite expectations of a US rate cut in September and escalating geopolitical tensions in the Middle East keeping gold stable after the previous session’s sharp decline. The price of gold dropped by $13.4 and landed at $2394.2 per ounce.
Among individual US stocks, Nvidia climbed by 3.8 percent, along with Meta and Microsoft, which rose by 3.9 percent and 1.1 percent, respectively. Apple declined by 1.0 percent amid discussions of legal disputes. However, the major bank Goldman Sachs rose by 2.4 percent.
The US ten-year Treasury bond rose by 12 basis points to 3.90 percent.
Asian stock markets continued their upward trend on Wednesday, led by another recovery in the Nikkei. The rise was due to the Bank of Japan unexpectedly becoming cautious about rate hikes amid market volatility, leading to a sharp fall in the yen. The unwinding of the yen carry trade, where investors borrow yen at low rates to buy high-yielding assets, was a driving force in Monday’s market crash but seemed to stabilize again. At 07:40, the Hang Seng and Shanghai were up by 0.6 percent and 1.9 percent, respectively, while the Japanese Nikkei 225 had increased by 2.9 percent.
On the Stockholm Stock Exchange, there is calm on the earnings front, but elsewhere in the Nordic region, Novo Nordisk also reported at 07:30. Novo Nordisk slightly missed expectations with an operating profit of 25,934 million Danish kroner. Among the morning’s recommendations, Pareto Securities raised the target price for the newly listed restaurant company Nordrest to 170 kronor (160) and reiterated the buy recommendation. Millicom’s recommendation was downgraded to sector perform by the bank Scotiabank, with a target price of $30.
On the macro level, the day began with Germany’s trade balance for June announced at 08:00, which stood at 20.4 billion euros. At the same time, Halifax’s house price index in the UK was announced, landing at 0.8 percent.