The S&P 500 Index ($SPX) (SPY) closed up by +0.38% on Tuesday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +1.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.13%. December E-mini S&P futures (ESZ26) rose +0.33%, and December E-mini Nasdaq futures (NQZ26) fell -0.07%.
Stock indexes recovered from early losses on Tuesday and settled mostly higher, with the Dow Jones Industrials climbing to a 5-week high. Better-than-expected corporate earnings results are propelling stocks higher. Weaker crude oil prices and lower bond yields on Tuesday also boosted market sentiment and supported stocks. However, weakness in chipmakers and AI-infrastructure stocks kept the Nasdaq 100 in negative territory.
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Tuesday’s US housing news was mixed for stocks. Sep housing starts unexpectedly fell -5.2% m/m to a 4-month low of 1.221 million, weaker than expectations of 1.305 million. Also, Sep pending home sales fell -7.3% m/m and -12.6% y/y, weaker than expectations of -0.5% m/m and -3.9% y/y. Conversely, Sep building permits, a proxy for future construction, fell -0.2% m/m to 1.400 million, stronger than expectations of 1.385 million.
Stocks have support from the prospect of solid quarterly earnings results. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +25% from a year earlier, up from a July estimate of 22%. As of Tuesday, 60 of the S&P 500 companies have reported results, with 83% beating estimates.
Nov WTI crude oil prices (CLX26) fell from a 5-month high today and closed down -0.73% on a report that Qatar and Pakistan had issued a fresh proposal to revive negotiations to end the Iran war. Crude prices initially jumped more than +5% on Tuesday amid escalating hostilities in the Middle East and the ongoing Russia-Ukraine war, which are disrupting global energy supplies. Iran said today that two oil tankers struck naval mines along the southern route of the Strait of Hormuz and caught fire. On Monday, Iran said it has “no choice” but to assert control over the Strait of Hormuz and that “the strait belongs to Iran, and the US is now the cause of the current situation and must pay the price.”
Markets are discounting a 17% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled mixed on Tuesday. The Euro Stoxx 50 fell to a 4.25-month low and closed down -0.38%. China's Shanghai Composite closed up +0.12%. Japan's Nikkei-225 Stock Average slid to a 1-month low and closed down -1.30%.
Interest Rates
December 10-year T-notes (ZNZ6) closed up +2 ticks on Tuesday. The 10-year T-note yield fell -2.1 bp to 5.119%. T-notes moved higher on Tuesday amid weak US housing news after Sep housing starts unexpectedly fell to a 4-month low and Sep pending home sales fell more than expected. T-notes also found support Tuesday after WTI crude oil prices fell from a 5-month high and moved lower, weakening inflation expectations. T-note gains were limited Tuesday as stock strength curbed safe-haven demand for government debt.
European government bond yields moved lower on Tuesday. The 10-year German bund yield fell -5.5 bp to 3.400%. The 10-year UK gilt yield fell -2.2 bp to 5.410%.
The German Oct ZEW survey expectations of the economic growth index fell 6.6 bp to 28.1, below expectations of 30.0.
German Sep PPI rose +1.9% m/m and +6.7% y/y, stronger than expectations of +1.6% m/m and +6.3% y/y, with the +6.7% y/y gain being the largest annual increase in 3.5 years.
Markets are discounting a 6% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Health care stocks rallied on Tuesday. Molina Healthcare (MOH) closed up more than +4%, and Centene (CNC), Humana (HUM), and UnitedHealth Group (UNH) closed up more than +3%. Also, Elevance Health (ELV), HCA Healthcare (HCA), the Cigna Group (CI), and CVS Health Corp (CVS) closed up more than +2%. In addition, United Health Services (UHS) and Cardinal Health (CAH) closed up more than +1%.
Pharmaceutical stocks moved higher on Tuesday. Untragenyx Pharmaceutical (RARE) closed up more than +6%, and Biogen (BIIB) closed up more than +4%. Also, Eli Lilly (LLY), Merck & Co (MRK), Amgen (AMGN), and Regeneron Pharmaceuticals (REGN) closed up more than +3%, and Pfizer (PFE), Jazz Pharmaceuticals Plc (JAZZ),Vertex Pharmaceuticals (VRTX), and Gilead Sciences (GILD) closed up more than +2%.
Airlines and cruise line operators moved higher on Tuesday as WTI crude oil prices fell from a 5-month high. American Airlines Group (AAL) closed up more than +3%, and Southwest Airlines (LUV), Carnival (CCL), Royal Caribbean Cruises (RCL), Norwegian Cruise Line Holdings (NCLH), United Airlines Holdings (UAL), Delta Air Lines (DAL). and Alaska Air Group (ALK) closed up more than +2%.
Software stocks rose on Tuesday, a supportive factor for the overall market. Thomson Reuters (TRI) and Workday (WDAY) closed up more than +4%, and Adobe Systems (ADBE) closed up more than +3%. Also, Intuit (INTU), ServiceNow (NOW), Atlassian Corp (TEAM), and Autodesk (ADSK) closed up more than +2%. In addition, Oracle (ORCL) closed up more than +1%.
Equifax (EFX) closed up more than +11% to lead gainers in the S&P 500 after reporting Q3 adjusted EPS of $2.26, better than the consensus of $2.20.
Hasbro (HAS) closed up more than +10% after reporting Q3 adjusted EPS of $2.90, well above the consensus of $1.88, and boosting its full-year adjusted Ebitda forecast to $1.58 billion to $1.63 billion from a previous forecast of $1.45 billion to $1.50 billion, better than the consensus of $1.49 billion.
3M Co (MMM) closed up more than +5% to lead gainers in the Dow Jones Industrials after reporting Q3 adjusted EPS of $2.50, above the consensus of $2.38, and raising its full-year adjusted EPS forecast to $9.10 to $9.15 from a previous forecast of $8.95.
MSCI Inc (MSCI) closed up more than +4% after reporting Q3 adjusted EPS of $5.11, stronger than the consensus of $5.03.
General Motors (GM) closed down more than -6% to lead losers in the S&P 500 after narrowing its 2026 adjusted earnings forecast to $14.5 billion to $15.5 billion from a July forecast of $14 billion to $16 billion.
DaVita (DVA) closed down more than -6% after Axios reported that te Trump administration is unveiling a new plan for kidney care that calls for injecting more competition into treatment markets.
Genuine Parts (GPC) closed down more than -5% after cutting its full-year adjusted EPS forecast to $7.50 to $7.75 from a previous estimate of $7.50 to $8.00, the midpoint below the consensus of $7.73.
General Electric (GE) closed down more than -3% despite raising its full-year EPS outlook, as the guidance implies Q4 adjusted earnings will be $1.97, weaker than the consensus of $2.04.
Earnings Reports (10/21/2026)
Abbott Laboratories (ABT), AT&T Inc (T), CME Group Inc (CME), Crown Castle Inc (CCI), CSX Corp (CSX), Danaher Corp (DHR), Elevance Health Inc (ELV), Globe Life Inc (GL), International Business Machines (IBM), Kinder Morgan Inc (KMI), Lam Research Corp (LRCX), Las Vegas Sands Corp (LVS), Meta Platforms Inc (META), Moody's Corp (MCO), NextEra Energy Inc (NEE), Northern Trust Corp (NTRS), Packaging Corp of America (PKG), Philip Morris International Inc (PM), Rollins Inc (ROL), Southwest Airlines Co (LUV), Teledyne Technologies Inc (TDY), Tesla Inc (TSLA), Texas Instruments Inc (TXN), Thermo Fisher Scientific Inc (TMO), United Rentals Inc (URI), Westinghouse Air Brake Technol (WAB).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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