U.S. stock futures climbed higher Tuesday, continuing the previous session’s rally as investors awaited more corporate results ahead of the latest Federal Reserve meeting.
By 06:50 ET (10:50 GMT), the Dow Futures contract was up 120 points, or 0.4%, S&P 500 Futures traded 9 points, or 0.2%, higher and Nasdaq 100 Futures climbed 10 points, or 0.1%.
The main indices on Wall Street all closed over 1% higher on Monday, with the blue chip Dow Jones Industrial Average gaining over 500 points, or 1.6%, in its best trading day since early June.
However, despite these gains, the major averages are on course to post their third straight month in the red, with both the S&P 500 and the Nasdaq Composite on course for their worst October since 2018.
Fed’s two-day policy meeting starts
Investors have been fretting that a resilient economy would mean that the Federal Reserve kept interest rates at elevated levels for longer than previously expected.
The U.S. central bank starts its latest two-day policy meeting later in the session, and investors widely expect the Fed will hold rates steady when it announces its decision on Wednesday.
Investors will be closely listening to what Chair Jerome Powell says during the afternoon press conference for clues about the next few months, as the Fed could keep the option open of raising rates one more time this year as it continues to fight inflation in the wake of stronger than expected data on economic growth.
U.S. Treasury yields retreat
The latest consumer confidence reading for this month tops the economic diary Tuesday, while investors will also be buoyed by a retreat in the 10-year benchmark bond yield after the U.S. Treasury issued on Monday a more modest year-end schedule of Treasury debt sales than many feared.
In terms of overseas news, the Bank of Japan maintained its very dovish stance, China’s economic activity data disappointed, while eurozone inflation dropped to a two-year low in October.
Earnings season enters second half
The third-quarter earnings season has reached its halfway mark, with 77.7% of the 251 companies in the S&P 500 that have reported earnings so far surpassing analysts’ estimates, according to data from London Stock Exchange Group (LON:LSEG).
Results are due Tuesday from the likes of chipmaker Advanced Micro Devices (NASDAQ:AMD), heavy equipment maker Caterpillar (NYSE:CAT), drugmaker Pfizer (NYSE:PFE) and casino operator Caesars (NASDAQ:CZR) Entertainment.
Oil rebounds ahead of Fed decision
Oil prices edged higher Tuesday, rebounding after a bruising session, although weaker-than-expected activity data from China limited the gains on fears of slowing fuel demand from the world’s largest crude importer.
By 06:50 ET, the U.S. crude futures traded 1% higher at $83.15 a barrel, while the Brent contract climbed 1% to $87.19 a barrel.
The market slumped nearly 3% on Monday despite Israel stepping up its ground assault on Gaza, as traders chose to bank recent profits ahead of a string of key economic events this week, most notably Wednesday’s Fed rates decision.
Events in the Middle East remain in focus, with traders wary of the conflict between Israel and Hamas expanding into a wider regional war in this oil-rich region.
Additionally, gold futures rose 0.1% to $2,008.05/oz, while EUR/USD traded 0.5% higher at 1.0663.
