US Stocks Eye Longest Winning Streak In 2 Years, Oil Tumbles: What's Driving Markets Tuesday?

U.S. stocks are attempting to post the longest streak of consecutive positive sessions in over two years.

As of midday trading in New York, both the S&P 500 and the Nasdaq 100 traded in the green, on track to record their respective seventh and eighth straight sessions of gains.

The decline in expectations regarding future interest rates is supporting the market, with traders already pricing in four 25-basis-point rate cuts by December 2024.

Mixed data from China and a record drop in producer prices in Europe have raised the risks of a global slowdown, causing oil prices to drop by 4% in Tuesday’s session and energy stocks to further decline.

Cues From Tuesday’s Trading:

The S&P 500 was 0.2% higher, while blue-chip stocks in the Dow Jones Industrial Average edged 0.1% higher.

Tech once again outperformed, as the Nasdaq 100 rose 0.9%. Small caps in the Russell 2000 eased 0.6%.

US Index Performance On Tuesday

Tuesday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust SPY was 0.2% higher to $436.50.
• The SPDR Dow Jones Industrial Average ETF DIA rose 0.1% to $341.42. 
• The Invesco QQQ Trust QQQ rose 0.9% to $372.39, according to Benzinga Pro data.

Looking at S&P 500 sector ETFs:

• The Energy Select Sector SPDR Fund XLE was the laggard, down 2.5%.
• The Technology Select Sector SPDR Fund XLK rose the most, up 1.1%.

Analyst Color:

“It’s likely that we’ll see some profit-taking now that the strong rally has subsided,” said fund manager Louis Navellier.

The fund manager attributes the recent rally to short covering, as on a technical basis, the market had become oversold. Another possibility is that for some accounts, tax loss selling is largely taken by the end of October, he said.

“Selling the last week of October and flipping to long for the first week of November has a very consistent winning bet, all part of the generally bullish seasonality of Nov-Dec,” he added.

“Clearly, we’re not in a ‘normal’ year with all the movement by the Fed, the narrow leadership of the Magnificent 7, and the outsized geopolitical situation,” Navellier said.

The seasonal rally has started with gusto, with crude oil, and industrial metals rising again, reflecting improving global demand, and the soft landing outlook is increasingly becoming the general consensus, he added. 

Latest Economic Data

Chicago Fed President Austan D. Goolsbee suggested there exists a “golden path” for reducing inflation without causing a recession, commonly referred to by the Fed as achieving a “soft landing.”

According to Fed Governor Christopher Waller, the labor market is starting to cool and getting close to the average from before the pandemic.

In its short-term energy outlook report, the Energy Information Administration (EIA) reduced its projection for global oil demand growth in 2023 by 300,000 barrels per day. At the same time, the EIA increased its forecast for global oil demand growth in 2024 by 80,000 bpd, now anticipating a year-on-year increase of 1.4 million bpd.

The Fed is due to release a report on outstanding consumer credit at 3 p.m. ET. Economists. on average, expect the outstanding consumer credit figure to increase by $10 billion in September following a $15.6-billion drop in August.

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Stocks In Focus:

Adobe Inc. ADBE rose 3%, reaching levels last seen in mid-December 2021.

Emerson Electric Co. EMR tumbled 7.6%, after missing both earnings and revenue expectations.

Alteryx, Inc. AYX rallied over 17% following the release of its quarterly results.

Air Products and Chemicals Inc. APD fell 11.7% after missing the Street’s revenue estimates.

Among the other stocks moving on earnings are Celsius Holdings, Inc. CELH (down about 4%) Choice Hotels International, Inc. CHH (up about 3%), D.R. Horton, Inc. DHI (up about 3%),, Datadog, Inc. DDOG (up about 30%), Expeditors International of Washington, Inc. EXPD (down about 1%), Fidelity National Information Services, Inc. FIS (down about 2%), The Hain Celestial Group, Inc. HAIN (down about 1%), Uber Technologies, Inc. UBER (up about 1.5%), Vertex Pharmaceuticals Incorporated VRTX (down about 1%), Sanmina Corporation SANM (down about 13%), ADTRAN Holdings, Inc. ADTN (down about 29%), Unisys Corporation UIS (up about 20%), Tripadvisor, Inc. TRIP (up over 10%), RingCentral, Inc. RNG (up nearly 3%) and Matterport, Inc. MTTR (up about 21%).

Those reporting after the close include Akamai Technologies, Inc. AKAM, eBay Inc. EBAY, Fidelity National Financial, Inc. FNF, Gilead Sciences, Inc. GILD, GoPro, Inc. GPRO, H&R Block, Inc. HRB, IAC Inc. AC, Occidental Petroleum Corporation OXY, Upstart Holdings, Inc. UPST, Lucid Group, Inc. LCID and Rivian Automotive, Inc. RIVN.

Commodities, Bonds, Other Global Equity Markets:

Crude oil fell 3.8%, with a barrel of WTI-grade crude trading at $77.83. The United States Oil Fund ETF USO was 3.5% lower to $72.30.  

Treasury yields were slightly lower, with the 10-year yield down by 7 basis points to 4.57% and the 30-year yield up by 8 basis points to 4.72%. The iShares 20+ Year Treasury Bond ETF TLT was 1.7% higher for the day. 

The dollar rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP up 0.3%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.3% lower to 1.0686.

European equity indices closed in the red. The SPDR DJ Euro STOXX 50 ETF  FEZ fell 0.4%. 

Gold edged 0.6% down to $1,966/oz, while silver fell 2.1% to $22.51. Bitcoin BTC/USD was 0.8% higher to $35,325.

Staff writer Piero Cingari updated this report midday Tuesday. 

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