STOCK indexes around the world jumped on Tuesday as US technology shares extended recent gains amid upbeat earnings reports while the 10-year US Treasury yield rose to its highest in more than four months.
The US dollar was lower on the day as other currencies, including sterling, were supported by investor expectations that interest rates could be increased sooner than some had forecast.
On Wall Street, the technology sector boosted the S&P 500 the most, while recent stronger-than-expected results have bumped up the forecast for S&P 500 earnings for the third quarter.
Investors remain worried, however, about the impact that higher costs, supply disruptions and labour shortages are having on companies.
“The key for the market to going up from here will not be higher multiples, it will have to be higher earnings. That’s why it’s so important to pay attention to what those profit margins do going forward and what the trajectory of GDP looks like,” said Eric Marshall, portfolio manager at Hodges Funds.
The Dow Jones Industrial Average rose 198.7 points or 0.56% to 35,457.31, the S&P 500 gained 33.17 points or 0.74% to 4,519.63 and the Nasdaq Composite added 107.28 points or 0.71% to 15,129.09.
The pan-European STOXX 600 index rose 0.33% while the MSCI’s gauge of stocks across the globe gained 0.73%.
The dollar index against a basket of other currencies was last down 0.22% on the day at 93.73 after earlier dropping to 93.50, the lowest since Sept 28.
The euro gained 0.25% to US$1.1640. Currencies, including sterling and the New Zealand dollar are benefiting from rising interest rate increase expectations. Bitcoin last rose 3.49% to US$64,201.08.
Oil prices climbed and were near multi-year highs as an energy supply crunch continued across the globe. Brent crude rose 75 cents to settle at US$85.08/barrel. US West Texas Intermediate (WTI) futures rose 52 cents to settle at US$82.96.
In other commodities, US gold futures gained 0.15% to US$1,769.70 an ounce. – Oct 20, 2021
