US equity indexes experienced an uptick after midday on Tuesday, fueled by a resurgence in technology stocks coinciding with a retreat in crude oil futures. The Nasdaq Composite soared by 1.1%, reaching 18,124.6, while the S&P 500 climbed 0.7% to 5,737.8, and the Dow Jones Industrial Average increased by 0.2%, landing at 42,024.0.
Notably, all market sectors aside from energy and materials recorded gains throughout the day, with technology emerging as the most significant contributor to this positive movement. In a notable geopolitical update, Hezbollah has publicly supported efforts toward a ceasefire in Lebanon. This announcement, reported by CNN, is particularly significant as it marks the first time this Iran-backed group has openly expressed support for a truce without attaching conditions related to the ongoing conflict in Gaza. On the investment side, the CBOE Volatility Index, often referred to as the fear gauge for investors, saw a decline of 5.5%, settling at 21.39, indicating a reduction in perceived market risk. Gold prices took a hit, falling 1.3% to $2,631.01 per ounce, while silver experienced a more pronounced drop of 4.5%, down to $30.56. Meanwhile, West Texas Intermediate crude oil futures plunged by 5.3%, trading at $73.07 per barrel.
The drop in crude oil can be attributed, in part, to recent demographics on the geopolitical landscape, as traders expressed disappointment over a lack of substantial fiscal stimulus announcements from Chinese policymakers. Macquarie reports that the communication from China’s National Development and Reform Commission indicated an acceleration of fiscal initiatives, yet revealed they would not be characterized as 'incremental'.
"The disappointment for traders anticipating new fiscal spending has contributed to a decline in many commodity prices today, such as crude oil, iron ore, and copper," stated Thierry Wizman, global foreign-exchange and rates strategist at Macquarie. In US market activity, shares of Alibaba Group ($BABA) fell 6.7% intraday, while JD.com ($JD) saw a decline of 7.3%.
Nio ($NIO) sank 6.3%, Baidu ($BIDU) dropped by 7%, and Bilibili ($BILI) experienced the largest decline of 13%. The Hang Seng Index in Hong Kong suffered a substantial drop, closing down 9.4%, marking its worst performance since 2008. On the economic front, Redbook reported a 5.4% increase in US same-store sales year-over-year for the week ending October 5, following a 5.3% annual increase the previous week. The international trade deficit for the US narrowed to $70.43 billion in August, improving from a gap of $78.92 billion in July.
This figure is consistent with expectations of a $70.5 billion deficit based on a Bloomberg survey, driven by an uptick in exports alongside a reduction in imports. The NFIB small business optimism index recorded a slight increase of 0.3 points sequentially, bringing it to 91.5 in September. This is the 33rd consecutive month below the historical average of 98, indicating ongoing challenges for small business leaders.
Bloomberg’s survey consensus anticipated a print of 92 for this index. In the bond market, US Treasury yields displayed mixed results throughout the day. The 10-year yield remained relatively unchanged at 4.02%, hovering close to its highest levels since late July, while the two-year rate fell by 4.2 basis points to 3.96%, retreating from its peak since late August. In corporate news, Goldman Sachs upgraded its price target for Palo Alto Networks ($PANW) to $425 from $376 while maintaining a buy recommendation.
Additionally, BNP Paribas Exane initiated coverage of the cybersecurity firm with an outperform rating, projecting a price target of $410. Shares of Palo Alto Networks surged by 5% intraday, showcasing strong performance among the S&P 500 and the Nasdaq indices..