The US stock markets closed slightly higher on Tuesday, with concerns about slowing economic growth dampening gains. The Dow Jones Industrial Average fell as bank stocks dropped following warnings of weakness in the current quarter, while energy-related stocks tumbled. Investor worries about energy demand, along with uncertainty surrounding the Federal Reserve’s interest rate decision next week and its economic outlook, also contributed to the market fluctuations. In addition, the upcoming US presidential election on November 5th adds another layer of uncertainty. Investors will closely monitor the consumer price index for August on Wednesday and the producer price report on Thursday. The broad S&P 500 index rose by 0.5%, while the tech-heavy Nasdaq and Dow Jones Industrial Average rose by 0.9% and fell by 0.2%, respectively.
Commodities experienced a broad decline yesterday. The global oil price benchmark Brent crude ended at its lowest level since December 2021 on Tuesday. This came after OPEC+ revised down its demand forecast for this year and 2025, countering delivery concerns from Tropical Storm Francine. The Organization of the Petroleum Exporting Countries (OPEC) stated in a monthly report on Tuesday that global oil demand is expected to increase by 2.03 million barrels per day (bpd) in 2024, down from last month’s forecast of 2.11 million bpd. Additionally, the US Energy Information Administration (EIA) announced on Tuesday that global oil demand is expected to reach a new high this year, while production growth will be lower than previous estimates. Data released on Tuesday showed that China’s exports increased in August at the fastest pace in nearly 1.5 years, but imports were disappointing due to subdued domestic demand. WTI crude oil fell by $2.8 to $65.9 per barrel, while Brent crude lost $2.5 to $69.3 per barrel.
Base metals declined across the board. Nickel was the biggest loser, dropping by 1.8%, followed by copper, zinc, and aluminum, all trading down by 0.9%. Tin decreased by 0.6%, while lead retreated by 0.2%. Gold prices remained steady above the $2,500 level on Tuesday as market participants positioned themselves ahead of US inflation data for further clues on the extent of interest rate cuts by the Federal Reserve next week. Lower rates reduce the opportunity cost of holding the non-yielding precious metal. As a result, the price of gold rose by $9.0 to $2,515.0 per ounce.
Among individual US stocks, Apple traded down by 0.5% after the company launched its new phones and other products on Monday. The product news met analysts’ expectations. Investment banks JP Morgan and Goldman Sachs fell by 5.2% and 4.4%, respectively, yesterday. Microsoft and Amazon were observed making gains on the market, climbing by 1.7% and 2.5%, respectively.
The US ten-year Treasury bond fell by 5 basis points to 3.64%.
Asian markets wavered and US stock futures fell on Wednesday after Democratic Vice President Kamala Harris and Republican Donald Trump clashed in a highly anticipated US presidential debate. This made investors nervous in Asian trading as markets prepared for US inflation data that could influence the Federal Reserve’s policy next week. The dollar remained defensive, while the yen strengthened by as much as 0.6% to 141.5 per dollar, the highest level since January. The Japanese index had traded down by 1.7% at 07:30, while the Chinese Shanghai and Hang Seng Indexes had fallen by 0.9% and 1.3%, respectively.
On the Stockholm Stock Exchange, it is quiet on the earnings front. Among the morning’s recommendations, Nordea lowered the target price for AstraZeneca to SEK 1,490 and changed the recommendation to sell from hold. BNP Paribas Exane set Essity’s target price at SEK 360, raising the stock from neutral to outperform. Investment bank JP Morgan upgraded Epiroc to neutral from underweight and set the target price at SEK 185.
On a macro level, Wednesday is relatively busy. The day begins with the UK’s monthly GDP for July and trade balance data at 8:00. At 14:30, the US monthly and annual consumer price index for August will be announced.