Tuesday September 25th

25-09-2018

Dow set to climb 100 points as rising rates lift bank stocks

U.S. stock-index futures rose on Tuesday as bank shares got a lift from higher interest rates. Around 7 a.m. ET, Dow Jones Industrial Average futures rose 85 points, indicating a gain of 103.95 points. S&P 500 and Nasdaq 100 futures also pointed to a higher open. Shares of Bank of America rose 0.7 percent before the bell, while J.P. Morgan Chase and Citigroup both gained about half a percent. Bank stocks gained as the 10-year Treasury note yield climbed to 3.11 percent, near its highest level of the year. The rise in yields comes as the Federal Reserve begins its two-day monetary policy gathering today, with analysts expecting the U.S. Federal Reserve to announce a quarter-point rate hike when it concludes its meeting tomorrow. The event will be watched closely to see if the central bank provides any signals as to where monetary policy will be heading over the coming months and into next year. Most respondents to the latest CNBC Fed Survey expect the central bank to raise rates two more times before year-end. Tuesday's gains come after stocks closed lowerin the previous session amid reports that Deputy Attorney General Rod Rosenstein was about to resign or be dismissed. The White House later issued a statement, however, saying that Rosenstein and President Donald Trump would meet Thursday amid conflicting reports. Equities were also pressured by the cancellation of trade talks between the U.S. and China as tensions between the largest world economies continue to simmer. China's Vice Commerce Minister Wang Shouwen said Tuesday that it was tough to proceed with trade negotiations at present and that it would be dependent on the "will" of the United States as to when talks would resume. Asia markets were broadly negative on Tuesday, amid concerns over the ongoing trade spat between the U.S. and China. Mainland China markets closed lower following Monday's public holiday. The Shanghai composite ended the trading day lower by 0.58 percent at around 2,781.14 while the Shenzhen compositealso slipped by 0.54 percent to close at about 1,437.31. The Nikkei 225, on the other hand, saw gains of 0.29 percent to close at 23,940.26. Markets in Hong Kong and South Korea are closed for public holidays. Oil prices on Tuesday were within reach of four-year highs hit in the previous session, as looming U.S. sanctions against Iran and unwillingness by the Organization of the Petroleum Exporting Countries (OPEC) to raise output supported the market. Brent crude futures were at $81.45 per barrel at 0421 GMT, up 25 cents, or 0.3 percent, and close to the intraday peak touched the previous day at $81.48, the highest level since November 2014. U.S. West Texas Intermediate (WTI) crude futures were at $72.27 a barrel, up 19 cents, or 0.3 percent from their last settlement. Gold held steady on Tuesday as the dollar stood firm ahead of the two-day U.S. Federal Reserve meeting beginning later in the day, while simmering U.S.-China trade tensions kept investors nervous about risks to global growth. Spot gold was barely changed at $1,198.80 by 0257 GMT. U.S. gold futures were down 0.1 percent at $1,203.10 an ounce.