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U.S. stocks on Tuesday were seen trading mostly higher after a firm comeback late in the previous session suggesting that investors are willing to buy stocks despite anxieties about Middle East tensions between the U.S. and Iran.
How did benchmarks perform?
Futures for the Dow Jones Industrial Average YMH20, +0.08% were trading 21 points, or less than 0.1%, higher at 28,662 while those for the S&P 500 index ESH20, +0.07% picked up 1.90 points, or 0.1%, at 3,245.50, and Nasdaq-100 futures NQH20, +0.33% advanced 28 points, or 0.3%, to reach 8,875.50.
On Monday, the Dow DJIA, +0.24% advanced 68.50 points, or 0.2%, to close at 28,703.38, while the S&P 500 SPX, +0.35% rose 11.43 points, or 0.4%, to end at 3,246.28. The Nasdaq Composite Index COMP, +0.56% gained 50.70 points, or 0.6%, finishing at 9,071.46. All three benchmarks opened the session firmly lower.
The Dow stands 0.6% off its record at 28,868.80, the S&P 500 is about 0.4% shy of its all-time peak at 3,257.85, while the Nasdaq sits just 0.2% from a record close of 9.092.19, all set on Jan. 2.
Read: What stock market investors need to know about intensifying U.S.-Iran tensions
What’s driving the market?
Investors are trying to brush off rising tensions in the Middle East, which were prompted by the killing of top Iranian Maj. Gen. Qassem Soleimani by the U.S. on Friday . Iranian forces have vowed to retaliate while Iraq’s parliament voted to expel U.S. forces from the country.
Tehran said that it is exploring 13 ways to retaliate against the U.S., with Ali Shamkhani, the head of Iran’s National Security Council, quoted as saying that “even if the weakest of these scenarios gains a consensus, its implementation can be a historic nightmare for the Americans.”
Javad Zarif, Iran’s foreign minister, said the U.S. would be dealt with “at a time and place of Iran’s choosing.”
Meanwhile, the Pentagon on Monday said it plans to send B-52 bombers and additional troops to the Middle Eastern region.
However, market participants are judging the developments as not yet sufficient to knock down a powerful stretch of gains for U.S. stocks that leaves the major indexes all less than 1% from records.
“Even though tensions between the US and Iran remain high, sentiment in equity markets has turned positive, as European indices are showing modest gains this morning,” wrote David Madden, market analyst at CMC Markets UK, in a daily research note.
“The fact US markets ended yesterday’s session higher paved the way for buying in Asia overnight as well as in Europe this morning. The gains might be limited seeing as the political situation is far resolved but it would appear that some of the fear has evaporated for now,” he said.
Looking ahead, the U.S. Commerce Department is expected to release November trade figures at 8:30 a.m. Eastern Time. At 10 a.m. ET, a report on factory orders for November and a reading of U.S. services from the Institute for Supply Management for December are due at the same time.
Which stocks were in focus?
Shares of Facebook Inc. FB, +1.88% may be in focus after the social-media platform said it is banning videos that have been manipulated using advanced tools.
Tesla Inc. shares TSLA, +1.93% were being watched as CEO Elon Musk celebrated the delivery of the first vehicles made in China.
Under Armour Inc. UA, -4.67% shares ticked up fractionally in pre-market trading after tumbling on Monday sparked by a pessimistic JPMorgan revenue forecast.
Shares of Microchip Technology Inc. MCHP, -1.43% were 5% higher in premarket action after an analyst price target upgrade.
How did other markets trade?
Oil futures was headed lower on Tuesday after the commodity picked up 3% on Monday and traded around its best level in months. U.S. benchmark West Texas Intermediate crude for February CLG20, -0.89% was last trading 43 cents, or 0.7%, lower at $62.82 a barrel.
Gold prices GCG20, -0.10% on Tuesday were edging up less than 0.1% higher at $1,569.80 an ounce after closing out Monday at a seven-year high, according to FactSet data.
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.39%, meanwhile, held relatively steady at 1.80%, after snapping a two-day losing streak. Bond yields move inversely to prices.
The U.S. dollar was about 0.1% higher versus a basket of its peers as measured by the ICE US Dollar index DXY, +0.12% .
In Asia overnight, the CSI 3000 000300, +0.75% closed more than 30 points, 0.75%, higher, while Japan’s Nikkei 225 NIK, +1.60% 371 points and 1.60%, higher. The Hang Seng HSI, +0.34% rose nearly 96 points, 0.3%.
In Europe, the FTSE 100 FTSE, +0.10% was 47 points, 0.6%, lower, while the STOXX Europe 600 SXXP, +0.36% ticked up nearly 2 points, 0.4%.
