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U.S. stock indexes hit new highs on Tuesday on strong corporate earnings, building on gains made in Monday’s session where soaring oil prices and strong corporate updates led Wall Street to a record high.
After gains in Europe, the S&P 500 Index and the Dow Jones Industrial Average hit record highs shortly after the market opened. Both indices had traced some of those gains by mid-afternoon in New York City, but remained in positive territory that day with the S&P up 0.4% and the Dow up 0.2%. . The S&P’s year-to-date gains on Tuesday were 22%.
Tuesday’s turmoil was in part attributable to good results from UPS and General Electric on Tuesday morning, which were up 7.2% and 2.3% respectively by mid-afternoon.
Investor optimism ahead of results from tech companies including Microsoft and Google’s parent company Alphabet after Tuesday’s bell also supported markets.
The tech-focused Nasdaq Composite climbed 1% as the US opened, but was 0.1% higher in trading by mid-afternoon.
Elsewhere, the European stock index Stoxx 600 closed 0.7% higher, reaching a level not exceeded for more than two months. London’s FTSE 100 closed 0.8% higher, although Entain shares fell by as much as a tenth on news that US betting group DraftKings would not make a firm takeover bid for the gaming company.
Hong Kong’s Hang Seng stock index closed 0.4% lower, tempered by the drop in real estate stocks when it emerged that Chinese developer Modern Land had missed a payment on a dollar bond worth $ 250 million, in the latest signs of unrest in China’s real estate industry.
U.S. oil prices topped $ 85 a barrel for the first time in seven years on Monday, as traders bet crude supplies would not keep pace with global demand, amid a growing energy crisis which also propelled the prices of natural gas upwards. West Texas Intermediate, the benchmark US oil index, rose 1.2% to $ 84.72 per barrel on Tuesday.
Larry Fink said on Tuesday it was highly likely that oil would hit $ 100 a barrel, according to a Reuters report. The CEO of BlackRock, the world’s largest asset manager, was speaking at the Future Investment Initiative conference in Saudi Arabia.
In government debt markets, the yield on the 10-year US Treasury bill was 0.01 percentage point lower at 1.62%. The yield on the UK gilt equivalent fell 0.03 percentage point to 1.10 percent. Bond yields move in the opposite direction to their prices.
Traders around the world are ready to receive announcements of tightening monetary policy and scaling back bond buying programs in the era of the pandemic, as governments respond to lingering inflationary pressures. The European Central Bank will meet on Thursday, while the US Federal Reserve and the Bank of England will meet next week.
Ahead of the UK budget on Wednesday, John Wraith, head of UK rate strategy at UBS, noted that government bond prices were picking up from recent lows, “in anticipation that we could potentially see a cut potentially quite significant in the number of gilt issues for the current fiscal year “.
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