The S&P 500 reached a fresh record on Tuesday, marking its second consecutive day of gains, lifted by a strong performance from Nvidia. Despite a sharp drop in consumer confidence to its lowest level in over three years, investor sentiment remained upbeat, as tech stocks continued to lead the market higher. Nvidia’s nearly 4% jump, following news of its CEO halting stock sales, played a crucial role in lifting the broader market, while the Dow Jones and Nasdaq also posted record closes. Meanwhile, mixed economic data, including a steep decline in consumer confidence and ongoing concerns about geopolitical instability, left investors cautious about the broader economic outlook.

Key Takeaways:

  • S&P 500 Reaches New Record High: The S&P 500 advanced 0.25%, closing at 5,732.93, achieving its second consecutive day of gains and hitting a fresh all-time high. Despite mixed economic data, the broader market remained resilient, driven by strength in tech stocks.
  • Dow and Nasdaq Also Close at Record Highs: The Dow Jones Industrial Average climbed 83.57 points, or 0.20%, to finish at a record 42,208.22. Meanwhile, the Nasdaq Composite outperformed, rising 0.56% to close at 18,074.52, lifted by a rally in technology stocks. Both indexes hit intraday all-time highs and posted record closes, reflecting strong investor sentiment.
  • Consumer Confidence Sees Biggest Drop in Three Years: Consumer confidence plunged to 98.7 in September, down from 105.6 in August, marking the largest one-month decline since August 2021. The unexpected drop raised concerns about consumer spending and the broader economy, as the labour market showed signs of cooling. Economists had expected a more moderate decline, forecasting a reading of 104.
  • European Markets Boosted by China’s Stimulus: European stocks finished higher on Tuesday, lifted by stimulus measures announced by China. The pan-European Stoxx 600 rose 0.6%, with most sectors in positive territory. Mining stocks, in particular, surged 4.5%, benefiting from China’s efforts to stimulate economic growth. The FTSE 100 gained 23.05 points, or 0.28%, to close at 8,282.76. France’s CAC 40 advanced 1.28%, driven by gains in industrial and mining stocks, while Germany’s DAX climbed 0.8% to 18,998. Investors remained optimistic as China’s central bank moved to boost its economy through a combination of reserve requirement cuts and additional stimulus measures.
  • Asian Markets Rally on China’s Economic Easing: Mainland China’s CSI 300 surged 4.33%, marking its best day in over four years, following a rare briefing from China’s central bank announcing significant stimulus measures. The Hang Seng Index in Hong Kong also posted strong gains, rising nearly 4% to log its best performance in seven months. Markets across the Asia-Pacific region reacted positively, with Japan’s Nikkei 225 rising 1.05% and South Korea’s Kospi gaining 0.4%. Investors responded favourably to China’s announcement that it would cut the reserve requirement ratio by 50 basis points and lower its key interest rates, aiming to spur growth and restore confidence.
  • Oil Prices Rise Amid Global Risks: Oil prices advanced on Tuesday, supported by China’s stimulus efforts, geopolitical risks, and the potential impact of a looming hurricane on US crude production. Brent crude rose 1.56% to close at $75.05 per barrel, while West Texas Intermediate (WTI) climbed 1.53% to $71.45. China’s monetary easing measures and ongoing tensions in the Middle East helped push prices higher, as traders remained concerned about possible supply disruptions.
  • US Treasury Yields Edge Lower on Weaker Economic Data: The 2-year US Treasury yield fell 4 basis points to 3.536%, while the 10-year Treasury yield remained flat at 3.732%. Investors moved into safer assets following weaker-than-expected consumer confidence data and ongoing geopolitical uncertainties. The bond market continued to reflect caution about the future path of economic growth and potential further rate adjustments by the Federal Reserve.

FX Today:

  • EUR/USD Holds Above Key Support Despite Weak US Data: The EUR/USD pair remained stable on Tuesday, trading around 1.1174. The euro has maintained its bullish structure, lifted by broad US dollar weakness and improved economic sentiment in the Eurozone. The pair has held above key support levels, with the 50, 100, and 200-period SMAs providing solid backing at 1.1125, 1.1091, and 1.1074, respectively. Immediate resistance is seen at 1.1200, with a potential push higher if the US dollar remains pressured by weak consumer confidence data. A break below 1.1074 could signal a shift in sentiment, but current trends suggest this is unlikely in the near term.
  • GBP/USD Supported by Softer US Dollar: GBP/USD traded around 1.3410 on Tuesday, supported by ongoing US dollar softness and resilient UK economic data. The pair remains above key moving averages, with the 200-period SMA at 1.3091 acting as a strong support level. Should the pair maintain its upward momentum, resistance near 1.3500 could be tested in the near term. However, a pullback toward the 50 or 100-period SMAs at 1.3239 and 1.3176 may occur if selling pressure builds. A break below the 200-period SMA (1.3091) could signal a deeper correction, though current market sentiment remains bullish.
  • USD/CHF Struggles to Break Resistance Levels: USD/CHF continued to face selling pressure on Tuesday, trading near 0.8433. The pair remained below critical resistance levels, with the 50, 100, and 200-period SMAs aligned at 0.8477 and 0.8523. This suggests a bearish outlook, with immediate support at the psychological level of 0.8400. A sustained break below 0.8400 could lead to further downside, with the next target at 0.8350. Only a break above the 200-period SMA at 0.8523 would indicate a potential reversal in the current downtrend.
  • AUD/USD Pushes Higher Amid Positive Risk Sentiment: AUD/USD climbed to 0.6890, benefiting from broad-based US dollar weakness. The pair broke above key moving averages, with the 50, 100, and 200-period SMAs now positioned at 0.6781, 0.6742, and 0.6721, respectively, acting as solid support. If the pair continues to hold above the 200-period SMA, further gains toward 0.6950 are likely. However, failure to sustain this level could see a pullback toward the 100-period SMA at 0.6742.
  • Gold Hits All-Time High Amid Weak US Data: Gold prices soared to new record levels, reaching an intraday high of $2,664 and closing at $2,662. The precious metal surged on the back of weak US consumer confidence data, which fell to 98.7 in September, its lowest level in more than three years. The dip in US Treasury yields also supported gold’s rally, with the 2-year yield falling by 4 basis points to 3.536%. Traders now eye the next major resistance level at $2,700, with potential upside toward $2,750 if current trends continue. On the downside, support lies at $2,650, with further retracement possible toward the September 18 low of $2,546 if profit-taking occurs.

Market Movers:

  • Nvidia Climbs on CEO Stock Sale Completion: Nvidia shares surged 3.9% on Tuesday after a regulatory filing revealed that CEO Jensen Huang had wrapped up his recent sales of the chipmaker’s stock. The news provided a strong boost to the tech sector and lifted the broader market, helping the S&P 500 hit a new record high.
  • Alibaba Soars on China Stimulus Measures: Shares of Alibaba skyrocketed 7.9%, driven by optimism surrounding China’s latest monetary stimulus package. Beijing’s announcement of measures to stimulate economic growth, including a 50 basis point cut to the reserve requirement ratio, lifted Chinese tech stocks listed in the US.
  • JD.com Jumps Amid China Economic Easing: JD.com led the rally among Chinese e-commerce companies, rising an impressive 13.9% on Tuesday. The market responded positively to China’s policy moves aimed at boosting economic growth, which helped fuel a broader rally across Chinese stocks.
  • Commerzbank Rises After Previous Day’s Drop: After falling 5.7% in the previous session, Commerzbank shares rebounded 2.2% on Tuesday. The bounce came amid news that UniCredit had increased its stake in the German lender to 21%, potentially signalling a forthcoming takeover bid.
  • Antofagasta Jumps on Mining Sector Surge: Shares of Antofagasta soared 7%, leading gains in the mining sector as China’s economic stimulus measures boosted commodity prices. Other miners, including Anglo-American, Glencore, and Rio Tinto, all rose more than 4%, contributing to a strong day for the sector.
  • Thor Industries Rallies 6% on Earnings Beat: Thor Industries climbed 6% after reporting stronger-than-expected fiscal fourth-quarter earnings. The company posted earnings of $1.68 per share on $2.53 billion in revenue, beating analysts’ estimates of $1.30 per share and $2.47 billion in revenue.
  • BioNTech Gains 5% on Morgan Stanley Upgrade: US-listed shares of BioNTech advanced nearly 5% following an upgrade from Morgan Stanley, which raised the company’s rating to overweight from equal weight. The investment bank highlighted BioNTech’s broad clinical development program as a key factor behind the upgrade.
  • Visa Drops Over 5% on Antitrust Lawsuit Concerns: Visa shares fell more than 5% on Tuesday after reports surfaced that the US Department of Justice is preparing to file an antitrust lawsuit against the credit card giant. Investors reacted swiftly to the news, sending Visa’s stock sharply lower amid concerns about the potential legal battle ahead.

As markets closed on Tuesday, the S&P 500 and Dow Jones continued to push into record territory, with Nvidia’s nearly 4% rally propelling the broader tech sector. Despite a sharp decline in US consumer confidence to its lowest level in three years, investor optimism remained largely intact, fuelled by hopes that China’s stimulus efforts will boost global economic growth. European and Asian markets followed suit, with strong gains across the board, particularly in mining and industrial stocks. Oil prices rose amid global supply concerns, while gold hit a new all-time high as US Treasury yields dipped. With economic uncertainty persisting, all eyes remain on global policy actions and their impact on future market trends.