The technology sector is also giving the US markets a tailwind on Tuesday. Oil prices continue to fall and hopes for US talks with Iran and China continue.
New York. After a very positive previous day, Tuesday is also shaping up to be an optimistic trading day on Wall Street. Falling oil prices and new confidence around the topic of artificial intelligence are giving Wall Street a boost.
The Dow Jones standard values remain unchanged at 52,145 points.
The broad S&P 500 is at 7,775 points, up around 0.2 percent.
The technology-heavy Nasdaq Composite advanced 0.4 percent to 27,240 points.
The Nasdaq 100, a reflection of the 100 non-financial companies with the highest market capitalization, gained 0.3 percent to 30,567 points.
Already on Monday, a rally in US technology stocks had pulled the Nasdaq up 2.3 percent, triggered primarily by strong demand for Meta's new AI chatbot “Muse”. The Meta share had risen by 11.4 percent.
Kyle Rodda, market analyst at Capital.com, explains the process as follows: “Wall Street is currently benefiting primarily from the strong profit development of US technology companies and new confidence around the AI topic.” There is a simple market picture behind this: strong corporate profits on the one hand, geopolitical risks and interest rate uncertainty on the other. Recently, the more optimistic scenario surrounding the AI trade has prevailed again on the market, also because the geopolitical risks have eased somewhat, says Rodda.
Oil price below $100 again
However, according to Rodda, the AI issue is not the only driver. Significantly falling crude oil prices are therefore particularly beneficial for stocks that are dependent on the economy. On Tuesday, North Sea Brent oil for delivery in November fell by 1.4 percent to around $99 a barrel.
The trigger is a report by the Japanese news agency Kyodo that Iran has offered to reopen the Strait of Hormuz within seven days if the US reduces military pressure in return. A spokesman for the Revolutionary Guards also explains that negotiations must be carried out if this is in the national interest. Additionally, Saudi Arabia is reportedly testing a restart of its east-west pipeline.
Trump speaks at the UN General Assembly
More constructive signals in US relations with Iran and China contribute to the positive mood. US President Donald Trump speaks at the UN General Assembly in New York on Tuesday. In advance, he had shown himself open to a meeting with Iranian President Massoud Peseschkian.
The upcoming meeting between Trump and China's head of state Xi Jinping is given particular importance. Jochen Stanzl, market analyst at Consorsbank, points out that the strong price gains in the AI sector gave the meeting additional significance: The USA is dependent on rare earths, while China does not have its own competitive AI chips. Both sides should therefore try to maintain the fragile balance between the two nations - neither is interested in escalation, he says.
Central bank in view
After the US Federal Reserve (Fed) raised its key interest rate last week, several central bankers are scheduled to give speeches on Tuesday: Fed Vice President Philip Jefferson, John Williams, head of the New York Fed, and Tom Barkin, head of the Fed in Richmond. Market participants hope that this will provide information as to whether further steps will be taken to combat inflation, which continues to be too high.
The market is expected to issue new US government bonds with a two-year term worth $69 billion. Since the Fed's recent interest rate hike, the US government has had to reckon with higher interest costs. The yield on the ten-year US Treasury bond fell to 4.93 percent on Tuesday.
Individual values in focus:
On: The sporting goods manufacturer On announces a new long-term forecast. The company also wants to buy back its own shares worth up to one billion dollars by the end of 2029. The shares of the Swiss company listed in the USA rose by 10.3 percent at the start of trading.
