Stock market today: Global stocks gain on Wall Street rally as war shock subsides for markets

BANGKOK (`) — Global stock prices rose Tuesday after U.S. stocks rose as investors reversed some of last week’s measures driven by worries about a war in the Middle East.

Oil prices fell and US futures also fell slightly.

Markets await China’s latest economic growth figures, due out on Wednesday. Economists forecast annual growth fell to below 5% in July-September from 6.3% in the previous quarter.

A weaker Chinese economy is weighing on regional and global trade and manufacturing, slowing the global recovery from the pandemic.

In early European trading, Germany’s DAX rose 0.1% to 15,258.33 and the CAC 40 in Paris also rose 0.1% to 7,031.52. Britain’s FTSE 100 rose 0.3% to 7,650.27.

Futures for the S&P 500 and Dow Industrials rose less than 0.1%.

In Asia, the Nikkei 225 in Tokyo rose 1.2% to 32,040.29 and the Hang Seng in Hong Kong rose 0.7% to 17,771.08.

The Shanghai Composite Index rose 0.3% to 3,083.50. In Australia, the S&P/ASX 200 rose 0.5% to 7,056.10. India’s Sensex rose 0.6% and Thailand’s SET rose 0.5%.

Markets appeared to have recovered for now, even as Israel prepared for a likely ground offensive in Gaza and fears grew that the conflict could spread along Israel’s border with Lebanon.

On Monday, Wall Street’s S&P 500 rose 1.1%, marking its best day since Hamas’ surprise attack on Israel on October 7. It closed at 4,373.63. The Dow rose 0.9% to 33,984.54 and the Nasdaq composite gained 1.2% to 13,567.98.

“The risk-off tone that permeated markets a few days ago appears to be dissipating thanks to major shuttle diplomacy by (U.S. Secretary of State Antony) Blinken and others in the region,” Robert Carnell and Nicholas Mapa of ING Economics said in a commentary. “But all of this is happening before Israel launches its ground offensive in Gaza, and that could quickly sour the mood again.”

Oil prices fell again after a volatile week sparked by concerns about war-related supply disruptions from Iran.

Early Tuesday, U.S. benchmark crude oil prices rose 2 cents to $86.68 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, it fell $1.03 to close at $86.66. It has fluctuated ever since the price rose from $70 over the summer to over $90 late last month.

Brent crude, the international standard, rose 15 cents to $89.80 a barrel. On Monday it fell $1.24 to $89.65 a barrel.

Gold prices fell $1.60 to close at $1,932.70 an ounce. Last week was the best in almost seven months as concerns grew about a possible Israeli invasion of the northern Gaza Strip.

Treasury yields have risen after plunging last week on fears that fighting in Gaza could escalate. Early Tuesday, the yield on the 10-year Treasury note was at 4.75%, up from 4.71% on Monday and 4.62% late Friday.

In the past, after a geopolitical shock, such as a war, financial markets initially weakened and then returned to longer-term fundamentals.

“Investors should remember that markets are very resilient, having survived countless wars, recessions and depressions and rewarding long-term investors with a well-crafted financial plan,” said Mark Hackett, head of investment research at Nationwide.

More than 50 companies in the S&P 500 will report summer earnings this week, including Bank of America, Johnson & Johnson and Tesla, and investors are hoping for a better earnings reporting season.

The remarkably resilient U.S. economy continues to perform well despite significantly higher interest rates implemented by the Federal Reserve to suppress inflation. FactSet estimates that earnings per share for S&P 500 companies likely rose 0.4% in the most recent quarter compared to a year ago.

Last week, several banks kicked off the reporting season with better reports than feared.

Charles Schwab rose 4.7% after the company reported higher profits than analysts expected for the three months ended September.

Lululemon shares rose 10.3% in their first trading session after S&P Dow Jones Indices said the apparel company will join its widely followed S&P 500 index. It replaces Activision Blizzard, which was purchased by Microsoft.

In foreign exchange trading, the US dollar rose to 149.61 Japanese yen from 149.51 yen. The euro slipped from $1.0561 to $1.0553.

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