Summary List Placement
Most stock indices were up on Tuesday following upbeat Chinese retail sales data.
Retail sales in China rose for the first time in 2020 by 0.5%.
Traders also prepared for the Federal Reserve policy meeting that starts on Tuesday.
Gold rose to a 2-week high as confidence in markets drove investors to sell US dollars.
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US stock index futures rose on Tuesday, pointing to a second day of gains on Wall Street, after Chinese data reflected ongoing recovery in the world’s second largest economy and investors eyed an upcoming Federal Reserve meeting on monetary policy.
US futures were suggesting a rally at the start of trade of 0.7-1.2% as of 7:40 am ET.
Some bullish sentiment came from Chinese retail sales, which rose for the first time in 2020, while a separate report showed industrial production expanded for a fifth straight month, suggesting that the economy continues to recover from the depths of the coronavirus slowdown.
“Chinese economic data beat expectations, with industrial production accelerating and retail sales returning to growth for the first time since the coronavirus pandemic wreaked havoc,” said Milan Cutkovic, market analyst at AxiCorp.
Read more: A Wall Street expert breaks down why 3 smaller retailers are poised for gains amid a down economy — and says they’re the best stock-market alternatives to behemoths like Costco and Target
The dollar came under pressure ahead of a 2-day Fed meeting that kicks off on Tuesday, the last before the US presidential election in early November.
Analysts said the central bank could reiterate its commitment to keep borrowing costs ultra-low for an extended period of time, meaning less scope for the dollar to gain against other currencies.
Jeffrey Halley, senior market analyst at OANDA, said: “It would be of no surprise if an expectedly uber-dovish FOMC re-energized the ‘buy everything FOMO’ trade to some degree.”
A major catalyst for the gains in the stock market so far this year has been the Fed’s policy of cutting interest rates to near-zero and pumping trillions of dollars of cash into the financial system to encourage borrowing and ward off more damage to the economy.
Here’s the market roundup as of 11.07 a.m. in London (06:07 am ET):
European equities rose, with Germany’s DAX up 0.3%, Britain’s FTSE 100 up 0.9%, and the Euro Stoxx 50 up 0.4%
Asian indexes closed higher, with China’s Shanghai Composite up 0.5%, Hong Kong’s Hang Seng up 0.4%, while Japan’s Nikkei fell 0.5%.
Futures on the Dow Jones Industrial Average rose 0.6% and the S&P 500 rose 0.7% and 0.5% while futures on the US Tech 100 rose 0.9%.
Oil prices rose, with West Texas Intermediate up 1.6% at $37.84, and Brent crude up 1.3% at $40.12
The benchmark 10-year Treasury yield rose to 0.67%.
Gold rose 0.6% to $1,975 per ounce.
The chatter around the Fed meeting tipped …read more
Source:: Business Insider