Global stocks, US yields up ahead of the Fed, corporate results

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[1/3]Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 15, 2022. REUTERS/Brendan McDermid/File Photo

Wall Street stocks gain in the US Treasury yields rise Oil prices rise 2%

NEW YORK, July 25 (Reuters) – Global stock markets and U.S. Treasury yields rose on Tuesday ahead of the Federal Reserve’s planned interest rate hike and as markets awaited a stream of quarterly earnings from corporate heavyweights.

Fed officials gather for their July monetary policy meeting, starting Tuesday, where the central bank’s rate-tightening cycle will top the agenda. Most market participants expect the Fed to hike rates by 25 basis points at the end of the meeting on Wednesday.

US Treasury yields rose, with benchmark 10-year bonds rising to 3.875% while rate-sensitive two-year bonds rose to 4.915%.

Alphabet (GOOGL.O), which owns Google, and Microsoft (MSFT.O) are among US tech giants expected to release their quarterly results this week, giving investors insight into the health of the US economy. The performance of these megacap tech companies underpins the nearly 19% year-to-date rally in the benchmark S&P 500 (.SPX).

“There’s a bit of a breather mentality ahead of what could really be a big market moving event with the big Fed meeting tomorrow,” said Ryan Detrick, chief market strategist at Carson Group.

“At the same time, the Fed is important, but corporate earnings are important. Overall, it’s been pretty positive and people are expecting earnings to be better than expected,” Detrick said.

The MSCI All-World Index (.MIWD00000PUS), which tracks stocks from more than 50 countries, rose 0.46%.

The European STOXX 600 (.STOXX) gained 0.48%, driven in part by shares of mining companies, which rallied after Chinese leaders pledged to bolster their booming economy.

On Wall Street, all three major indexes were trading higher, led by gains in stocks of technology, materials and communications services companies.

The Dow Jones Industrial Average (.DJI) rose 0.52% to 35,411.24, the S&P 500 (.SPX) gained 0.40% to 4,554.64 and the Nasdaq Composite (.IXIC) added 0.19% to 14,058.87.

“A 25 basis point hike is pretty much priced in, but clearly what matters more is whether (at Fed Chairman Jerome Powell’s press conference) it will be a dovish or hawkish hike,” Detrick added.

Oil prices hit three-month highs as signs of tighter supplies and promises from Chinese officials lifted morale.

Brent crude futures gained 2.22% to $82.87 a barrel after hitting $83.30 earlier, the highest since April 19. U.S. West Texas Intermediate (WTI) crude rose 2.35% to $78.88.

Reporting by Chibuike Oguh in New York Editing by Chris Reese

Our standards: The Thomson Reuters Trust Principles.

Chibuike primarily reports on large US-based private equity firms, including Blackstone, KKR, Carlyle and Apollo. He previously worked at Bloomberg News and holds master’s degrees in journalism from New York University and Edinburgh Napier University. Phone: 332-999-6154

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