U.S. stocks rally as earnings season kicks off
The U.S. stock market started the week on a positive note, as investors shrugged off worries about the escalating conflict in the Middle East and focused on the third-quarter earnings season. The S&P 500 index rose 1.06% on Monday, its best performance since February, while the Dow Jones Industrial Average gained 0.84% and the Nasdaq Composite added 1.17%.
The earnings season kicked off with strong results from some of the biggest banks in the country, such as JPMorgan Chase, Wells Fargo and Citigroup, which beat analysts’ expectations and reported solid growth in revenue and profit. The financial sector was among the top performers on Monday, as higher interest rates and rising asset management fees boosted their outlook.
On Tuesday, more banks are set to report their quarterly numbers, including Bank of America, Goldman Sachs and Bank of New York Mellon. Investors will also pay attention to other sectors, such as healthcare, consumer discretionary and technology, which are expected to show robust earnings growth in the third quarter.
According to LSEG data, third-quarter earnings for S&P 500 companies are estimated to have increased 2.2% year-over-year, up from an estimated increase of 1.3% a week earlier.
Biden visits Israel and Jordan amid Gaza crisis
President Joe Biden left for a high-stakes visit to Israel and Jordan on Tuesday, as he sought to ease the tension in the region and prevent a wider escalation of the war in Gaza. Biden’s trip comes after Washington said Israeli Prime Minister Benjamin Netanyahu had agreed to let humanitarian aid reach besieged Gazans, following intense diplomatic pressure from the U.S. and other allies.
Biden is expected to meet with Netanyahu and other Israeli leaders in Jerusalem, where he will reaffirm the U.S. commitment to Israel’s security and urge them to seek a peaceful resolution of the conflict. He will also visit Ramallah, where he will meet with Palestinian President Mahmoud Abbas and express his support for a two-state solution.
Biden will then travel to Amman, where he will hold talks with King Abdullah II of Jordan, a key U.S. partner in the region and a major donor to the Palestinians. Biden will discuss ways to enhance cooperation on regional issues, such as counterterrorism, refugees and economic development.
Biden’s visit is seen as a crucial test of his foreign policy skills and his ability to balance his support for Israel with his concern for the humanitarian situation in Gaza. The U.S. has faced criticism from some of its allies and adversaries for its perceived lack of leadership and engagement in the Middle East crisis.
Oil prices stabilize after volatile week
Oil prices steadied on Tuesday, after a volatile week that saw them fluctuate between gains and losses amid conflicting signals from the global supply and demand situation. Brent crude futures traded at $83.64 per barrel, up 0.14%, while West Texas Intermediate (WTI) crude futures were at $81.64 per barrel, down 0.05%.
Oil prices were supported by signs of strong demand recovery in some of the major consuming countries, such as China, India and the U.S., as well as by supply disruptions in some of the key producing regions, such as Norway, Libya and Nigeria.
However, oil prices were also weighed down by concerns about the impact of the rising COVID-19 cases in Europe and Asia on fuel consumption, as well as by expectations of higher output from OPEC+ members in November.
Oil prices were also influenced by the geopolitical tensions in the Middle East, which raised fears of supply disruptions or military confrontation in the oil-rich region. However, some analysts said that the risk premium was limited by the ample spare capacity of Saudi Arabia and other Gulf producers.
Gold prices retreat as safe-haven demand fades
Gold prices fell on Tuesday, as investors reduced their demand for safe-haven assets amid easing worries about the Middle East conflict and improving risk appetite in the global markets. Spot gold was down 0.16% at $1,767.76 per ounce, while U.S. gold futures were down 0.18% at $1,768.40 per ounce.
Gold prices were also pressured by a stronger U.S. dollar, which rose against a basket of major currencies on Tuesday, making gold more expensive for holders of other currencies. The dollar index was up 0.12% at 94.22.
Gold prices were also affected by higher U.S. Treasury yields, which increased the opportunity cost of holding non-yielding bullion. The yield on the benchmark 10-year Treasury note rose to 1.62% on Tuesday, up from 1.58% on Monday.
Gold prices have been under pressure in recent weeks, as investors have shifted their attention to other assets that offer higher returns or inflation protection, such as stocks, cryptocurrencies or commodities.
