U.S. Markets Steady Ahead of Earnings and Trade Talks; Oil Near Lows, Gold Retreats

Index Update:  U.S. stocks were set for a quiet open Tuesday, with the S&P 500 and Dow steady and the Nasdaq 100 near record highs after strong tech gains. The U.S. secured a key minerals supply deal with Australia ahead of President Trump’s meeting with China’s Xi Jinping, easing concerns over rare earth shortages. Investors looked to earnings from major industrial and defense firms, including Raytheon, Texas Instruments, and Lockheed Martin, for further insight. General Electric, Danaher, Northrop Grumman, 3M, and GM were poised to open higher after strong results, while Netflix extended gains ahead of its earnings release later in the day.

Market Movers:  On Monday, the top gainers were GSI Technology, Inc. (+155.31%), followed by Replimune Group, Inc. (+98.78%). On the contrary United Homes Group, Inc (-52.46%), and Perspective Therapeutics, Inc. (-28.95%) declined the most the same day.

Commodities Update:  Oil prices edged higher on Tuesday but remained near multi-year lows as oversupply concerns persisted ahead of U.S.–China trade talks. WTI rose to $57.5 per barrel and Brent to $61.5, with data showing a record 1.24 billion barrels of crude moving on tankers worldwide. The IEA warned of a potential record surplus next year as output rises and demand weakens, while rising U.S. inventories added to bearish sentiment despite modest draws in refined products. Gold prices fell nearly 2% to $4,270 per ounce after hitting a record high, as investors took profits ahead of key geopolitical and monetary events. Markets awaited U.S.–China negotiations and the Federal Reserve’s expected rate cut next week, while optimism grew over a possible resolution to the U.S. government shutdown. Despite the pullback, gold remains up over 60% year to date, supported by expectations of further Fed easing and continued safe-haven demand.

Macro Updates:  President Trump expressed optimism on Monday about reaching a “fair trade deal” with Chinese President Xi Jinping and downplayed concerns over a potential conflict regarding Taiwan ahead of their upcoming meeting in South Korea. While Trump said he did not believe China planned to invade Taiwan, U.S. Trade Representative Jamieson Greer later adopted a firmer stance, accusing Beijing of economic coercion targeting U.S. strategic industries and warning of possible U.S. retaliation if such actions persist.

Bonds Commentary:  The U.S. 10-year Treasury yield hovered around 4% on Tuesday as investors assessed the impact of the ongoing government shutdown, trade developments, and monetary policy outlook. Optimism grew after economic adviser Kevin Hassett suggested the shutdown could end this week, while President Trump expressed confidence in reaching a trade deal with China’s Xi Jinping later this month. With limited data due to the shutdown, markets are focused on Friday’s September CPI report and widely expect the Federal Reserve to cut rates by 25 basis points next week, with further easing likely into next year.

Futures Update:  U.S. stock futures edged slightly lower on Tuesday, pausing after recent gains as investors awaited a wave of corporate earnings. Dow Jones, S&P 500, and Nasdaq 100 futures each slipped about 0.1%. The previous session saw Wall Street rise, led by gains in technology and financial stocks, amid optimism that the prolonged federal government shutdown could soon be resolved.

Following the upward movement observed during last Friday's session, stocks experienced a more pronounced rise during Monday's trading. The S&P 500 increased by 71.14 points, or 1.07%, closing at 6,735.14. From a technical standpoint, the index found support at key levels and gradually moved higher, indicating the potential for further upward momentum in the near term. Additionally, the 14-day Relative Strength Index (RSI) is climbing above the mid-point, further reinforcing a positive bias. Key support levels are around 6,600, with resistance expected near 6,800.