U.S. stock futures were mildly mixed early Tuesday, holding most of the previous day’s rally as Treasury yields moved lower.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.17%
rose 2 points to 4188 -
Dow Jones Industrial Average futures
YM00,
+0.35%
rose 71 points, or 0.2%, to 33088 -
Nasdaq 100 futures
NQ00,
-0.04%
eased 15 points, or 0.1%, to 14402
On Monday, the Dow Jones Industrial Average
DJIA
rose 511 points, or 1.58%, to 32929, the S&P 500
SPX
increased 49 points, or 1.2%, to 4167, and the Nasdaq Composite
COMP
gained 146 points, or 1.16%, to 12789.
What’s driving markets
Lower benchmark borrowing costs were helping S&P 500 futures hold most of Monday’s 1.2% bounce off five-month lows.
The 10-year Treasury yield
BX:TMUBMUSD10Y
dipped to 4.84%, near the bottom of a two-week range, after only a minor tweak to monetary policy by the Bank of Japan was seen leaving Japanese government bonds relatively unattractive and thus supporting demand for U.S. debt. The U.S. dollar
USDJPY,
jumped back above ¥150.
News on Monday that the U.S. Treasury was planning to borrow less than expected this quarter and would thus have to issue less paper was also seen underpinning bond prices. The Treasury will announce its third quarter refunding program on Wednesday.
Another factor helping suppress Treasury yields, and therefore possibly helping sentiment in equities, was data showing manufacturing in China nudged back into contraction unexpectedly in October.
Such signs of a struggling global economy will be in the Federal Reserve’s thinking as it begins its two-day policy meeting on Tuesday. It is expected midweek to leave rates unchanged at a range of 5.25% to 5.50%.
“In the absence of a surprise rate decision, or a surprise forward guidance about a rate decision, what will really, really matter this week…is the US debt situation, and the Treasury Department’s quarterly announcement on details regarding the size and the maturity of the bonds that they will issue to borrow that extra $776 billion this quarter,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Meanwhile, the third-quarter earnings season rumbles on. Companies reporting results on Tuesday include Pfizer
PFE,
Caterpillar
CAT,
and Amgen
AMGN,
before the opening bell rings on Wall Street, followed by Advanced Micro Devices
AMD,
Paycom Software
PAYC,
and Caesars Entertainment
CZR,
U.S. economic updates set for release on Tuesday include the third-quarter employment cost index, released at 8:30 a.m. Eastern, the August S&P Case-Shiller home price index at 9 a.m., and consumer confidence for October at 10 a.m.
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