Global stock markets experienced a rebound after a period of decline fueled by inflation concerns, as attractive valuations and strong corporate earnings drew in investors seeking opportunities. Nearly 350 companies within the S&P 500 saw their share prices rise, with banks showing particular strength and Dell Technologies Inc. jumping due to a positive outlook. Broadcom Inc. was set to report its earnings later in the day.
The improved market sentiment was supported by the relative stability in oil prices, which followed a two-day surge caused by conflict over control of the Strait of Hormuz in the Middle East. This moderation in oil prices helped alleviate fears of further energy supply disruptions and potential price pressures that could prompt the Federal Reserve to raise interest rates. Treasury yields, which had recently surged to multi-year highs, remained largely unchanged, further contributing to the calm.
Angelo Kourkafas from Edward Jones noted that stocks were "finding some footing after a difficult start to September," despite lingering cautious investor sentiment due to elevated geopolitical tensions following new U.S. strikes against Iran. While a recent flare-up in Middle East hostilities had initially raised concerns, New York Fed President John Williams indicated that inflation continues to ease, with the impact of tariffs fading and higher energy prices not broadly affecting other services. The S&P 500 rose by 0.5%, the Dow Jones Industrial Average by 0.8%, and the MSCI World Index by 0.2%, though the Nasdaq 100 was little changed and the Stoxx Europe 600 fell by 0.3%. Bitcoin and Ether also saw slight declines.
In the bond markets, the yield on 10-year U.S. Treasuries was largely unchanged at 4.80%. Germany's 10-year yield, however, advanced four basis points to 3.38%, and Britain's 10-year yield rose one basis point to 5.23%. Commodity markets saw West Texas Intermediate crude oil rise by 0.3% to $90.53 a barrel, while spot gold increased by 1.1% to $4,375.42 an ounce.
