Wall Street pushed higher early Tuesday, even as Hong Kong’s Hang Seng market tumbled more than 9% after Beijing he abstained from major spending initiatives as the Chinese economy slows.
S&P 500 futures rose 0.4% before the bell, while Dow Jones Industrial Average futures rose 0.2%.
The rise in bond yields, which sent stocks tumbling Monday, leveled off early Tuesday and oil prices fell after five straight days of gains.
US stocks are hovering near record territory as interest rates feel relief I’m finally going back down now that the Federal Reserve has broadened its focus to include you keeping the economy humming instead of just fight high inflation.
When Treasury bonds, which are seen as the safest investments possible, pay more in interest, investors become less likely to pay very high prices for stocks and other riskier investments.
For investors, it’s hard to ignore that a 10-year Treasury bond is paying a yield of 4.03%, up from 3.62% three weeks ago.
The yield on two-year Treasury bonds, which more closely tracks expectations for the Fed, fell to 3.98% on Tuesday after jumping to 3.99% a day earlier.
Treasury yields could also get a boost from the recent jump in oil prices. Crude oil prices increased due to this fear worsening tensions in the Middle East it could ultimately disrupt the global flow of oil.
Benchmark U.S. crude fell $1.62 to $75.52. It had gained 3.7% on Monday and rose nearly 11% in October. Brent crude, the international standard, fell $1.68 to $79.25 a barrel. It had also jumped 3.7% on Monday.
As earnings season began, PepsiCo shares fell 1% after it lowered its organic revenue forecast for the year. US consumers continue to do so pull back on purchasing snacks and drinks after years of price increases.
DocuSign jumps 5.6% after S&P Dow Jones Indices announced that the electronic document signature company will join the S&P MidCap 400 Index. DocuSign will replace MDU Resources, which will be moved to the S&P SmallCap 600 Index after announcing the week last spinoff of its construction services subsidiary, Everus Construction Group.
In Asia, the Hang Seng index lost 9.4% to close at 20,926.79. Technology and China-related stocks led the decline.
Shares in Shanghai initially rose 10% on Tuesday, then fell slightly details of the economic stimulus Beijing officials’ plans fell short of what investors had hoped for.
The Shanghai Composite index closed up 4.6% at 3,489.78. In Shenzhen, Japan’s smallest market, the main index gained 8.9%.
Hong Kong stocks posted strong gains over the past week, while mainland Chinese markets were closed for a week-long holiday and reopened on Tuesday. The progress has been fueled by Beijing’s recent announcements of plans for greater support for the economy and financial markets.
“The Chinese market rally has hit a wall, leaving investors deflated. The reopening surge after a holiday week barely had time to regain momentum before fizzling out, and now the once-enthusiastic bulls are licking their wounds,” Stephen Innes of SPI Asset Management said in a commentary.
Shares of food delivery company Meituan fell 15.5% while e-commerce giant Alibaba slumped 8.8%. Rival JD.com slumped 11.9%.
In other Asian trade, Tokyo’s Nikkei 225 index lost 1% to 38,937.54. while the dollar fell to 147.79 Japanese yen from 148.18 yen. A stronger yen tends to push down stock prices as it hurts the profits of major exporting producers.
Seoul’s Kospi fell 0.6% to 2,594.36. Australia’s S&P/ASX 200 index fell 0.4% to 8,176.90.
In early European trading, Germany’s DAX lost 0.2%, Paris’ CAC 40 lost 0.6% and London’s FTSE 100 fell 1.1%.
The euro rose slightly to $1.0979 from $1.0977.
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AP Business Writer in Hong Kong Zen Soo contributed.
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