On Tuesday, the S&P 500 Index closed up 0.25%, the Dow Jones Industrial Average rose 0.10%, and the Nasdaq 100 Index increased by 0.51%. Strength in chipmakers and travel stocks, alongside a decrease in the 10-year Treasury yield to 4.20%, supported this market uptick. The ADP report indicated an increase of just 9,000 jobs in the last four weeks, marking the lowest growth in five weeks, and pending home sales unexpectedly rose by 1.8% month-over-month.
Crude oil prices surged over 2% as tensions escalated due to Iranian attacks on Middle Eastern energy infrastructure, including a halt in operations at the Shah gas field in the UAE. The International Energy Agency (IEA) noted that the ongoing conflict is disrupting approximately 7.5% of global oil supply, with expectations that the war could reduce supply by 8 million barrels per day this month. Goldman Sachs warned that prices could exceed $150 per barrel if the situation persists.
The two-day Federal Open Market Committee (FOMC) meeting began on Tuesday, with market expectations indicating that the federal funds target range will remain unchanged at 3.50%-3.75%. Current estimates suggest only a 3% chance of a rate cut during this policy meeting.
