GLOBAL MARKETS-Stocks Rise Ahead of Tech Earnings, Fed Decision

Source: Reuters | Editor: Yudho Winarto

GLOBAL MARKET - Oct 27 - MSCI's global equities gauge rose on Tuesday as investors awaited earnings from US technology companies and the Federal Reserve's next policy decision.

Oil futures settled down nearly $2 as investors turned to the prospect of Middle East peace talks, although prices remained near multimonth highs due to shipping disruptions.

Iran's security chief Mohsen Rezaei met Supreme Leader Ayatollah Mojtaba Khamenei on Tuesday, a day after holding talks with representatives of Saudi Arabia, Turkey and Pakistan. State media said Khamenei had stressed the importance of pursuing Iran's interests and maintaining its conditions for ending the war.

A series of AI-related funding announcements on Monday from Meta, SpaceX and Broadcom encouraged investors, along with Anthropic's unveiling of its initial public offering filing.

"The AI news gave headway to the bulls and got the bond market settled. That's been helping and we've seen small caps perform better," said Sahak Manuelian, managing director for global equities sales and trading at Wedbush Securities.

"There seems to be more noise around coming up with some kind of solution to the conflict in the Middle East. Who knows what that means but, having said that, crude oil is trading down and that's a tailwind for stocks," said Manuelian.

The Dow Jones Industrial Average rose 15.99 points, or 0.03%, to 52,377.57, the S&P 500 gained 45.83 points, or 0.60%, to 7,722.60 and the Nasdaq Composite rose 308.43 points, or 1.18%, to 26,477.81.

The Russell 2000 small-cap index finished up 1.2% for its second straight daily advance.

Investors were awaiting earnings reports due this week from AI hyperscalers Microsoft, Amazon and Alphabet , looking for signs their spending is yielding returns as expected.

Big Tech earnings could also influence investor appetites for the Anthropic IPO and Meta's $95 billion equity fundraising.

MSCI's gauge of stocks across the globe rose 6.58 points, or 0.59%, to 1,129.74. Earlier, the pan-European STOXX 600 index finished up 0.47%.

CENTRAL BANKS EXPECTED TO STAY ON HOLD

Fed policymakers have indicated they will not raise short-term borrowing costs again on Wednesday, but with inflation concerns front and center, investors think a pause in rate hikes will not last long. Traders are pricing in an increase from the Fed in December.

Along with the Fed, the European Central Bank and the Bank of Japan are due to make policy decisions this week, with economists expecting all three to stand pat on interest rates, leaving investors to focus on comments from policymakers to gauge the rates outlook.

In currencies, the dollar nudged higher against the euro, Japanese yen and sterling as traders prepared for the central bank meetings.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.35% to 102.38, with the euro down 0.43% at $1.1124.

Against the Japanese yen, the dollar strengthened 0.28% to 157.94.

In fixed income, US Treasury yields mostly edged higher with investors weighing the outlook for interest rate hikes ahead of Wednesday's Fed decision.

The yield on benchmark US 10-year notes rose 1.28 basis points to 4.999% while the 30-year bond yield rose 1.25 basis points to 5.3135%.

The 2-year note yield, which typically moves in step with interest rate expectations for the Fed, rose 2.8 basis points to 4.739%.

US crude settled down 1.83%, or $1.86, to $99.90 a barrel and Brent finished at $113.88 per barrel, down 1.67%, or $1.93.

In precious metals, spot gold rose 1.09% to $4,060.29 an ounce, while spot silver rose 0.95% to $54.44 an ounce.