US stocks close higher amid falling Treasury yields

US stocks rose Tuesday, boosted by declines in Treasury yields as Wall Street assessed the geopolitical risks from the Israel-Hamas war.

The benchmark 10-year Treasury yield fell nearly 13 basis points to about 4.65 per cent, as investors sought safe assets amid the conflict. Yields and prices move in opposite directions. The move reflected the first reaction to the Israel-Hamas conflict in the US bond market, which was closed Monday for Columbus Day.

Oil prices also eased after rallying in the previous session, providing relief to investors.

Falling bond yields lifted stocks, as Wall Street remained concerned over the recent quick rise in interest rates. Investors also began looking past the geopolitical risks caused by the Israel-Hamas war, helped by Friday’s stronger-than-expected September payrolls report and some optimism ahead of a slate of third-quarter earnings this week.

Overall, the Dow Jones Industrial Average was higher by 0.40 per cent, or 134.65 points, to close at 33,739.30. The S&P 500 gained 0.52 per cent, ending at 4,358.24. The tech-heavy Nasdaq Composite added 0.58 per cent, landing at 13,562.84.

PepsiCo shares rose 1.9 per cent after the beverage and snack maker reported better-than-expected third-quarter results and raised its earnings outlook. Some energy and industrial names continued their stretch into the green on Tuesday, with Enphase Energy rising 5 per cent and Generac Holdings gaining 3.8 per cent.

Another bright spot during the day’s trading session was small caps, with the Russell 2000 index of small-capitalisation companies and the S&P Small Cap 600 index gaining just over 1 per cent each. The Russell — up nearly 1 per cent so far this year — rose for a fifth consecutive day, a feat last accomplished in July.

And looking ahead to this week's third-quarter earnings results, JPMorgan Chase is expected to lead the earnings season for large US banks with a projected 25 per cent increase in EPS compared to the previous year, according to LSEG estimates. In contrast, Goldman Sachs and Citigroup are anticipated to report the largest declines in EPS at 35 per cent and 26 per cent, respectively, while Morgan Stanley's EPS is also expected to decrease.

Turning to US sectors, Energy was the only sector that closed lower. This was largely due to the drop in oil prices. Utilities was the best performer.

Futures

The SPI futures are pointing to a 0.4 per cent gain.

Currency

One Australian dollar at 7:30 AM was buying 64.31 US cents.

Commodities

Gold added 0.54 per cent. Silver was up 0.37 per cent. Copper lost 0.45 per cent. Oil fell 0.67 per cent.

Figures around the globe

European markets closed higher. London’s FTSE gained 1.82 per cent, Frankfurt advanced 1.95 per cent, and Paris closed 2.01 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei gained 2.43 per cent, Hong Kong’s Hang Seng added 0.84 per cent while China’s Shanghai Composite closed 0.7 per cent lower.

The Australian share market closed 1.01 per cent higher at 7,040.64.

Dividends payable

Briscoe Group Ltd (ASX:BGP)
Cochlear Ltd (ASX:COH)
Count Ltd (ASX:CUP)
Macmahon Holdings Ltd (ASX:MAH)
Monash IVF Group Ltd (ASX:MVF)
News Corp (ASX:NWS)
NRW Holdings Ltd (ASX:NWH)
PSC Insurance Group Ltd (ASX:PSI)
Sigma Healthcare Ltd (ASX:SIG)
Southern Cross Electrical Engineering Ltd (ASX:SXE)
TPG Telecom Ltd (ASX:TPG)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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