US benchmark equity indexes ended higher Tuesday as markets awaited official inflation data for September due later in the week. Small business optimism in the US improved less than expected last month due to persistent inflationary pressures affecting business owners, as revealed by the latest survey from the National Federation of Independent Business.
This highlights ongoing challenges in the economy as owners grapple with uncertainty regarding operational costs. "Uncertainty makes owners hesitant to invest in capital spending and inventory, especially as inflation and financing costs continue to put pressure on their bottom lines," stated Bill Dunkelberg, Chief Economist at NFIB.
This reflects the growing concerns among small business owners about the impact of inflation on their operations and future investments. Additionally, the US trade deficit showed signs of narrowing in August, attributed to a rise in exports while imports experienced a slight dip, according to government data.
This development is encouraging, signaling a potential strengthening of the US economy. "The resolution of the dockworkers strike earlier this month ensures supply chain disruptions would be minimal and removes a key risk to trade outlook," noted economists at Oxford Economics. This situation could bolster trade stability as businesses adjust to changing dynamics and regain confidence in supply chains. In the commodities markets, November West Texas Intermediate crude oil saw a decline of $3.57, settling at $73.57 per barrel, whereas December Brent crude, serving as the global benchmark, also experienced a drop of $3.30 to reach $77.64.
This decline marks the first time in six sessions that prices have fallen, primarily influenced by China's decision to forego new stimulus measures aimed at revitalizing its weakening economy, which surpassed concerns related to a tumultuous situation in the Middle East. In corporate news, Palo Alto Networks ($PANW) shares increased by 5% following Goldman Sachs' decision to raise its price target on the stock from $376 to $425, while maintaining a buy rating.
This positive outlook from a major investment bank reflects strong confidence in the cybersecurity firm's potential for growth. Similarly, PepsiCo ($PEP) revised its full-year organic revenue growth forecast, buoyed by the company's Q3 earnings that surpassed Wall Street expectations. However, despite strong earnings, sales fell short of overarching forecasts, resulting in a 2% increase in share value.
Investors remain cautiously optimistic as the beverage and snacks company navigates through the complexities of consumer demand and market conditions. Overall, the market remains vigilant, with investors keenly observing economic indicators and corporate earnings to gauge future market trajectories..