The S&P 500 Index ($SPX) (SPY) on Tuesday rose +0.60%, the Dow Jones Industrial Average ($DOWI) (DIA) rose +0.03%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +1.29%. December E-mini S&P futures (ESZ26) rose +0.62%, and December E-mini Nasdaq futures (NQZ26) rose +1.32%.
US stocks rallied Tuesday due to a -1.8% decline in crude oil prices and generally positive earnings results. Strong chip stocks and AI optimism supported the Nasdaq 100 index. US economic reports were mixed, but a jump in US consumer confidence was encouraging for stocks.
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The Sep US durable goods orders report of +1.8% was slightly weaker than market expectations of +1.9% m/m but was still a relatively strong report. Sep durable goods orders ex-transportation rose +0.5% m/m, slightly weaker than market expectations of +0.6%. Sep core capital goods orders, excluding defense and air transportation, rose +1.2%, stronger than market expectations of +0.8%.
US home price reports were mixed. The Aug FHFA House Price Index rose +0.3% m/m, slightly stronger than market expectations of +0.2%. However, the S&P Cotality CS 20-City home price index rose +0.27% m/m and +2.65% y/y, slightly weaker than market expectations of +0.30% m/m and +2.61% y/y.
The Conference Board’s Oct US consumer confidence index rose +7.5 points to 91.7 from September’s revised 84.2 (preliminary 81.9), much stronger than market expectations for a decline to 81.0.
Oct US new home sales fell -0.6% m/m to 676,000, stronger than expectations for a larger decline to 651,000.
Dec WTI crude oil prices closed -1.8% lower on Tuesday after Iranian supreme leader Mojtaba Khamenei called for pursuing conditions that Iranian officials have set to end the war. He also called for strengthening ties with neighboring countries after top officials from Iran, Saudi Arabia, Pakistan, and Turkiye met on Monday in Tehran. Khamenei’s statement came after his meeting Tuesday with Iran’s Supreme National Security Council Secretary Mohsen Rezaee where they reportedly discussed the war and the Strait of Hormuz. Tuesday’s report raised hopes that Iran’s supreme leader might be seeking a deal to end the US naval blockade and fully reopen the Strait of Hormuz.
On the US side, President Trump told Fox News on Sunday that it’s “getting to be decision time” on whether he will make a deal with Iran or “finish it off.” The US is building up military forces in the Middle East into November and is evacuating non-essential embassy personnel in the Gulf region, fueling speculation that the US might launch a new military attack on Iran after next Tuesday’s (Nov 3) US election.
Markets are awaiting the results of Tuesday’s election in Israel to see whether Prime Minister Benjamin Netanyahu kept his job. Election turnout was reportedly very high. No single party is expected to claim a parliamentary majority, meaning it could take time for the leading party to form a majority government.
On the AI front, hyper-scalers Alphabet and Microsoft report earnings on Wednesday, and Amazon.com reports on Thursday.
The FOMC, in its 2-day meeting that ends Wednesday, is expected to leave interest rates unchanged but maintain a hawkish bias in response to persistent inflation. The ECB meets this Thursday, and the Bank of Japan meets this Friday. Both the ECB and BOJ are expected to leave rates unchanged, with a much higher chance of rate hikes in December.
Stocks are supported by the prospect of solid quarterly earnings. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +26% from a year earlier, up from a July estimate of 22%. As of Monday, 132 of the S&P 500 companies have reported results, with 80% beating estimates.
Overseas stock markets closed mixed. The Euro Stoxx 50 rose +0.79%. China’s Shanghai Composite closed down -1.33%. Japan's Nikkei-225 Stock Average closed up +1.73%.
Interest Rates
December 10-year T-notes (ZNZ6) fell by -1 tick on Tuesday. The 10-year T-note yield fell -0.2 bp to 4.986%. T-note prices saw some support from the -1.8% decline in oil prices. However, the 10-year breakeven inflation expectations rate rose by +0.5 bp to 2.353%.
The T-note market traded cautiously ahead of the 2-day FOMC meeting that ends Wednesday, which is not expected to produce a rate hike but is likely to produce hawkish commentary about the need for additional rate hikes to address above-target inflation. Markets are pricing in only a 7% chance of a hike at this week’s meeting, but an 88% chance at the next FOMC meeting on December 8-9.
Supply overhang emerged as the Treasury sold $70 billion of 5-year T-notes on Wednesday, though the auction results aligned with market expectations. The Treasury will sell $44 billion of 7-year T-notes on Thursday.
European government bond yields were mixed on Tuesday. The 10-year German bund yield fell -0.7 bp to 3.360%. The 10-year UK gilt yield rose +0.2 bp to 5.346%.
The French 10-year OAT government bond yield rose +2 bp to 4.92% but remained well below last Thursday’s 24-year high of 5.14%. The French bond market was relieved that Moody’s did not downgrade France’s debt rating on Monday, leaving France’s bond rating unchanged at Aa3 with a negative outlook.
Markets are pricing in a 3% chance of a +25 bp ECB rate hike at this Thursday’s ECB meeting, but a 78% chance of a rate hike at the following meeting on December 17.
US Stock Movers
The Magnificent Seven closed mostly higher, except for declines in Meta and Microsoft. Tesla (TSLA) was the leader with a gain of more than +4%, adding to Monday’s rally of more than +5%. On Monday, Barclays upgraded Tesla to overweight from equal-weight, citing the possibility of a buyout by SpaceX.
Meta (META) fell -1.6% as the company boosted its equity sale on Monday to $98 billion from $95 billion due to strong demand. The company is selling common and preferred stock to support its AI plans. The company sold $25 billion of common stock on Monday, more than the original plan of $22.5 billion, along with $12.5 billion of preferred shares. The company will also sell up to $60 billion of Class C non-voting shares in an at-the-market stock sale program.
Apple (AAPL) closed up +0.9% despite reports on Reddit and other social media sites that users are having problems with cracked screens on the iPhone Duo, Apple’s popular new foldable phone. Bloomberg News independently verified some of these reports. Apple said in a statement that it was “aware of an issue impacting the inner display on a small number of iPhone Duo units,” and that users should contact Apple for a replacement.
Chip stocks rallied sharply, with the iShares Semiconductor ETF (SOXX) closing up +3.9%. On Semiconductor (ON) rallied by more than +6%. Microchip Technology (MCHP) and AMD (AMD) rallied by more than +5%. Broadcom (AVGO) rallied +4.0% on an upgrade by D.A. Davidson to buy from neutral, citing upside from Anthropic.
Intel (INTC) rallied more than +3% after announcing the purchase of Israeli startup Classiq Technologies in a bid to expand its reach into quantum computing. Intel’s CEO said, “Joining forces with Classiq transforms Intel’s Quantum Computing Group into a full-stack quantum computing business.” Intel may have missed out to Nvidia in the initial surge in demand for AI chips, but it's trying to gain an edge in quantum computing.
In a boost for the AI theme, Anthropic filed for its IPO on Nasdaq on Monday, with a ticker symbol of ANT. Analyst commentary on Anthropic’s prospectus released Monday has been generally positive. Anthropic officials hope to match or exceed SpaceX’s blockbuster IPO that raised $86 billion. The road show is expected to begin the week of November 9, and the pricing window is targeted for the week of November 16.
UPS (UPS) rallied more than +5% after stronger-than-expected revenue guidance.
Moderna (MRNA) rallied more than +4% despite a downgrade by William Blair to market perform from outperform due to valuation concerns after the stock’s recent surge.
Coca-Cola (KO) fell -1.6% after some disappointment about a sales miss in North America although the company’s overall results were strong.
Bitcoin rose +1.1%, supporting crypto stocks. Galaxy Digital (GLXY) rallied more than +10%. Iren Limited (IREN) and Riot Platforms (RIOT) rallied more than +7%.
GM (GM) rallied more than 5% after announcing it will move its listing from the NYSE to Nasdaq to promote its tech-focused approach to automotive technology like OnStar, self-driving, and EV vehicles. GM would also benefit from buying from tracking funds if it were included in the Nasdaq 100 index, possibly as soon as the December 2026 Nasdaq 100 index reconstitution. The stock will retain its GM ticker symbol.
Earnings Reports (10/28/2026)
International Paper Co (IP), Amphenol Corp (APH), Boston Scientific Corp (BSX), Garmin Ltd (GRMN), Wingstop Inc (WING), OGE Energy Corp (OGE), Labcorp Holdings Inc (LH), Avantor Inc (AVTR), Prosperity Bancshares Inc (PB), Fortive Corp (FTV), Jones Lang LaSalle Inc (JLL), Old Dominion Freight Line Inc (ODFL), Biogen Inc (BIIB), Phillips 66 (PSX), Automatic Data Processing Inc (ADP), IDEX Corp (IEX), HF Sinclair Corp (DINO), Hayward Holdings Inc (HAYW), Otis Worldwide Corp (OTIS), SiteOne Landscape Supply Inc (SITE), TE Connectivity PLC (TEL), Clean Harbors Inc (CLH), Jersey Mike's Subs Inc (JMKE), GE HealthCare Technologies Inc (GEHC), VF Corp (VFC), Flex Ltd (FLEX), Lennox International Inc (LII), CH Robinson Worldwide Inc (CHRW), Etsy Inc (ETSY), NiSource Inc (NI), Littelfuse Inc (LFUS), Penske Automotive Group Inc (PAG), Parsons Corp (PSN), GE Vernova Inc (GEV), Generac Holdings Inc (GNRC), Vertiv Holdings Co (VRT), Aon PLC (AON), Smurfit Westrock PLC (SW), Evercore Inc (EVR), Fedex Freight Holding Co Inc (FDXF), Masco Corp (MAS), Kirby Corp (KEX), Align Technology Inc (ALGN), T-Mobile US Inc (TMUS), Ford Motor Co (F), Chipotle Mexican Grill Inc (CMG), Raymond James Financial Inc (RJF), EPR Properties (EPR), Hanover Insurance Group Inc/Th (THG), Murphy USA Inc (MUSA), Churchill Downs Inc (CHDN), Honeywell Aerospace Inc (HONA), Everest Group Ltd (EG), VICI Properties Inc (VICI), Carvana Co (CVNA), Equinix Inc (EQIX), KLA Corp (KLAC), Axis Capital Holdings Ltd (AXS), Encompass Health Corp (EHC), Sprouts Farmers Market Inc (SFM), FedEx Corp (FDX), MGM Resorts International (MGM), Morningstar Inc (MORN), Viking Therapeutics Inc (VKTX), Darling Ingredients Inc (DAR), Service Corp International/US (SCI), Gen Digital Inc (GEN), Aurora Innovation Inc (AUR), ServiceNow Inc (NOW), Mid-America Apartment Communit (MAA), Houlihan Lokey Inc (HLI), Microsoft Corp (MSFT), Nextpower Inc (NXT), Invitation Homes Inc (INVH), FormFactor Inc (FORM), Universal Display Corp (OLED), Fortinet Inc (FTNT), Carlisle Cos Inc (CSL), Antero Resources Corp (AR), WEX Inc (WEX), Sterling Infrastructure Inc (STRL), Antero Midstream Corp (AM), Markel Group Inc (MKL), O'Reilly Automotive Inc (ORLY), eBay Inc (EBAY), American Water Works Co Inc (AWK), Alphabet Inc (GOOGL), NewMarket Corp (NEU), Tyler Technologies Inc (TYL), Pilgrim's Pride Corp (PPC), Flowserve Corp (FLS), GFL Environmental Inc (GFL).
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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