Investing.com -- U.S. stocks jumped as bond yields retreated ahead of the release of quarterly earnings from some major tech companies.
At 11:08 ET (15:08 GMT), the Dow Jones Industrial Average rose 288 points or 0.9%, while the S&P 500 was up 0.8% and the Nasdaq was up 1%.
Yields fall back, easing pressure on stocks
The main indices on Wall Street closed in a mixed fashion Monday, as the benchmark 10-year Treasury yield traded above the closely followed 5% level before falling back. The broad-based S&P fell 0.2% and the blue chip Dow fell 0.6%, while the tech-heavy Nasdaq rose 0.3%.
The benchmark 10-year Treasury yield has continued to drop Tuesday, falling back to 4.835% and easing the pressure on the highly-leveraged tech sector, in particular.
Bill Ackman's hedge fund Pershing Square (NYSE:SQ) Capital Management has covered its bond short position, the billionaire investor posted on Monday, saying it was too risky to remain short bonds at current long-term rates.
Microsoft and Alphabet (NASDAQ:GOOGL) top the earnings slate
The earnings season kicks into top gear this week, with around 30% of S&P 500 companies slated to report.
Earnings due from tech giants Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG) are Tuesday’s highlight after the closing bell.
Coca-Cola (NYSE:KO) beat expectations on revenue and profit as consumers took on higher prices. Shares rose 2.9%. General Motors (NYSE:GM) beat expectations for the quarter but pulled back its guidance because of the ongoing labor strike, which has cut into production. Shares were flat.
About 17% of S&P 500 companies have already reported earnings, and three-quarters of them have posted earnings surpassing analysts’ expectations, according to FactSet.
U.S. composite PMI slows in October
Investors will also be keeping an eye on the release of flash U.S. PMIs, providing clues on the economic picture ahead of the Federal Reserve’s policy-setting meeting next week.
The U.S. composite Purchasing Managers' Index was 51. With crude prices rising, growth could slow heading into the fourth quarter.
The news from Europe wasn’t encouraging, as the eurozone’s composite PMI fell to 46.5 in October, down from 47.2 the prior month. This was the lowest reading since November 2020, and outside of the COVID-19 pandemic months it was the weakest since March 2013.
Oil bounces as Gaza diplomacy continues
Crude prices edged higher Tuesday, bouncing after the previous session’s sharp losses, as developments in the Israel-Hamas war and the potential for a wider conflict in this important oil-exporting region remained the dominant theme.
The benchmarks tumbled around 3% on Monday as a series of diplomatic missions to Israel and Gaza pushed up hopes over a de-escalation in the conflict. This was also accompanied by Hamas agreeing to free some hostages.
However, the situation remains highly fluid with the market seemingly divided over whether the conflict will continue to ease from here or flare up again.
(Oliver Gray contributed to this item.)