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Dow aims to extend gains as investors await Apple event, fresh economic data and start of Fed meeting

Market Snapshot

Apple’s product launch event kicks off at 1 p.m. Eastern Tuesday


Bloomberg

U.S. stock-index futures rose Tuesday, putting major benchmarks on track for another session of gains as the Federal Reserve begins a two-day policy meeting and as investors await a product debut for Apple Inc., as well as a fresh round of economic reports.

How are equity benchmarks performing?

Futures on the Dow Jones Industrial Average
YM00,
+0.80%

YMU20,
+0.79%

 were up 224 points, or 0.8%, at 28,095, while S&P 500 futures
ES00,
+0.88%

ESU20,
+0.88%

 climbed 31.30 points, or 0.9%, to 3,403.50. Nasdaq-100 futures
NQ00,
+1.27%

NQU20,
+1.27%

 advanced 142.25 points, or 1.3%, to trade at 11,408.75.

On Monday, the Dow
DJIA,
+1.18%

rose 327.69 points, or 1.2%, to finish at 27,993.33, after briefly trading above the 28,000 threshold. The S&P 500
SPX,
+1.27%

added 42.57 points, or 1.3%, closing at 3,383.54. The Nasdaq Composite
COMP,
+1.87%

climbed 203.11 points, or 1.7%, to end at 11,056.65, snapping a two-session losing streak.

The Russell 2000 index
RUT,
+2.65%

of small-capitalization stocks rose 39.70 points, or 2.7%, to end at 1,536.97, outperforming the major stock benchmarks.

What’s driving the market?

Stocks looked likely to climb Tuesday helped by positive economic data from China where retail sales grew in August for the first time in 2020, up by 0.5% year-over-year last month, according to China’s National Bureau of Statistics.

Investors were heartened Monday by positive news on a vaccine against COVID-19 from AstraZeneca
AZN,
+0.54%

 and BioNTech 
BNTX,
+3.60%

as well as by merger news involving Nvidia 
NVDA,
+5.81%

and Oracle
ORCL,
+4.31%

 and will watch Tuesday for a product launch by Apple Inc.
AAPL,
+2.99%

as well as several IPOs.

READ MORE:   Amazon, Apple, Boeing, Starbucks, Visa and Other Stocks to Watch This Week

The Federal Reserve is slated to start its policy-setting meeting later today, followed by a news conference and fresh statement from its officials on Wednesday, while central-bank decisions from the Bank of England and the Bank of Japan follow on Thursday.

“Global markets are focused on the two-day Fed meeting which will start on Tuesday, markets are modestly positive as investors anticipate a dovish outcome,” wrote Mihir Kapadia, chief executive of Sun Global Investments, in a Tuesday note. The meeting of the policy-setting Federal Open Market Committee also would be the first since the central bank introduced its new policy framework of average-inflation targeting.

“Although other factors across the continent have helped with this positive momentum, the overwhelming factor which is guiding the markets is the Fed,” wrote Kapadia. “Investors will be looking for signs as to what the U.S. growth and inflation outlook looks like and the possible responses from the Fed,” he said.

Investors are also watching for Snowflake Inc., a cloud-computing company, which is set to list on the New York Stock Exchange later today and has the backing of Warren Buffett’s Berkshire Hathaway
BRK.A,
+0.79%

BRK.B,
+0.92%

 and Salesforce.com
CRM,
+1.45%
.

On Monday, Snowflake raised the proposed price range for its initial public offering to $100 to $110, up from a prior $75 to $85. The company is planning to offer 28 million shares to raise up to $3.08 billion

Separately, Apple Inc.
AAPL,
+2.99%

will hold its first virtual-only product reveal at 1 p.m. Eastern Time, where the Cupertino, Calif., tech behemoth is expected to show off its latest smartwatch and iPads, a debut which may provide a fresh catalyst for shares of the popular company. Apple shares were up 2.9% in premarket trade and are up 57% this year.

READ MORE:   Hundreds of brands are pulling ads from Facebook. Its largest advertisers aren't among them.

Read:Apple’s launch event has one big unknown

The New York Fed’s Empire State business conditions index rose 13.3 points to 17 in September. Economists had expected a reading of 6, according to a survey by Econoday. The gain reverses a 14 point decline in August.

A report on industrial production and capacity utilization for August is due at 9:15 a.m. ET.

See: IPO market gears up for busiest week since May of 2019—Uber’s IPO week—with 12 deals on tap

Which stocks were in focus?
  • Shares of Oracle Corp.
    ORCL,
    +4.31%

     were in focus after The Wall Street Journal reported that the Trump administration was reviewing the companies bid to become the “strategic partner” for TikTok’s U.S. operations, which is owned by China-based ByteDance.

  • BioNTech
    BNTX,
    +3.60%

     shares jumped 4% in premarket trade Tuesday, after the drug company said it will receive up to 375 million euros ($445.9 million) in funding from the German Federal Ministry of Education and Research to support the accelerated development of a COVID-19 vaccine in collaboration with partner Pfizer Inc. PFE, +2.60% and Fosun Pharma.

How are other markets trading?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
0.683%

 rose 1.4 basis points to 0.679%. Bond prices move inversely to yields.

The ICE U.S. Dollar Index
DXY,
-0.15%
,
which tracks the performance of the greenback against its major rivals, fell 0.2%.

Gold futures
GCZ20,
+0.68%

rose 0.6%. The U.S. crude oil benchmark
CL.1,
+0.72%

 was up 1.2% as Hurricane Sally, a dangerous, Category 2 storm, closed in on the Gulf Coast.

Global equities were on the rise, with the Stoxx Europe 600 index
SXXP,
+0.86%

 up 0.9%, while the U.K.’s benchmark FTSE 100
UKX,
+0.86%

rose 1.2%. In Asia, Hong Kong’s Hang Seng Index
HSI,
+0.37%

rose 0.4% and the Shanghai Composite Index
SHCOMP,
+0.51%

 advanced 0.5%. Japan’s Nikkei
NIK,
-0.44%

fell 0.4%.

READ MORE:   U.S. retail sales slow in July; obstacles mount for nascent economic recovery

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