U.S. stocks moved higher early Tuesday morning, just one day before OPEC is scheduled to meet in Vienna to discuss cuts in oil production and on the day job openings and factory orders reports are due to be released.
Wall Street went up to its best day in months on Monday after some unexpectedly weak data on the economy raised the possibility that the Federal ReserveFederal Reserve won't have to be so aggressive about hiking interest rates.
The S&P 500's leap was 2.6% to 3,678. The Dow Jones Industrial Average went up 2.7% to 29,490. The Nasdaq composite gained 89, and the Nasdaq composite gained 2.3% to 10,815. There was a lot of pressure that's been battering markets this year, and stocks took their cue from the bond market, where yields fell to ease some of the pressure.
The yield on the 10 year Treasury, which helps set rates for mortgages and many other types of loans, fell to 3.62% from 3.83% late Friday. It was as high as 4% last week after starting the year at just 1.51%.
A report on U.S. manufacturing came in weaker than expected, along with data showing a drop in construction spending from July to August. It may seem discouraging, but it could mean that the Federal ReserveFederal Reserve can relax its interest rates to beat the high inflation damaging households finances.
By raising rates, the Fed is making it more expensive to buy a house, a car or most other items on credit. The hope is to slow the economy just enough to make sure inflation of the purchases is needed to keep prices rising quickly. The Fed has pulled its key overnight interest rate to a range of 3% to 3.25%, up from virtually zero as recently as March.
Most traders believe that it will be more than a full percentage point higher by early next year. Financial markets and corporate profits have weakened as central banks in the world hike rates in concert.
Asian shares rose Tuesday after a rally in U.S. shares was encouraged by a rally in the US stock market after some weak economic data raised hopes that the Federal ReserveFederal Reserve might be able to relax away from aggressive interest rate hikes.
Japan's benchmark Nikkei 225 rose by 2.8% to 26,959 in the afternoon. South Korea's Kospi gained 2.5% to 2,209. Australia's S&P ASX 200 rose by 3.8% to 6,699. Its benchmark interest rate was boosted by the central bank for a sixth consecutive month to a nine-year high of 2.6%.
The Reserve Bank of Australia has increased its cash rate by a quarter point over the past three months, but it is smaller than those at recent monthly meetings. The bank lifted the rate by a quarter point at its board meeting in May, it was the first rate hike in more than 11 years. It's now at its highest point since August 2013 when the bank cut the rate from 2.75% to 2.5%.
Asian equities were positive on Tuesday after a corrective session on Tuesday, as traders look at potentially oversold market conditions, Anderson Alves at ActivTrades said in a report.