- Most stock indices were up on Tuesday following upbeat Chinese retail sales data.
- Retail sales in China rose for the first time in 2020 by 0.5%.
- Traders also prepared for the Federal Reserve policy meeting that starts on Tuesday.
Gold rose to a 2-week high as confidence inmarkets drove investors to sell US dollars.- Visit Business Insider's homepage for more stories.
US stock index futures rose on Tuesday, pointing to a second day of gains on Wall Street, after Chinese data reflected ongoing recovery in the world's second largest economy and investors eyed an upcoming Federal Reserve meeting on monetary policy.
US futures were suggesting a rally at the start of trade of 0.7-1.2% as of 7:40 am ET.
Some bullish sentiment came from Chinese retail sales, which rose for the first time in 2020, while a separate report showed industrial production expanded for a fifth straight month, suggesting that the economy continues to recover from the depths of the coronavirus slowdown.
"Chinese economic data beat expectations, with industrial production accelerating and retail sales returning to growth for the first time since the coronavirus pandemic wreaked havoc," said Milan Cutkovic, market analyst at AxiCorp.
The
Analysts said the central bank could reiterate its commitment to keep borrowing costs ultra-low for an extended period of time, meaning less scope for the dollar to gain against other currencies.
Jeffrey Halley, senior market analyst at OANDA, said: "It would be of no surprise if an expectedly uber-dovish FOMC re-energized the 'buy everything FOMO' trade to some degree."
A major catalyst for the gains in the stock market so far this year has been the Fed's policy of cutting interest rates to near-zero and pumping trillions of dollars of cash into the financial system to encourage borrowing and ward off more damage to the economy.
Here's the market roundup as of 11.07 a.m. in London (06:07 am ET):
- European equities rose, with Germany's DAX up 0.3%, Britain's FTSE 100 up 0.9%, and the Euro Stoxx 50 up 0.4%
- Asian indexes closed higher, with China's Shanghai Composite up 0.5%, Hong Kong's Hang Seng up 0.4%, while Japan's Nikkei fell 0.5%.
- Futures on the Dow Jones Industrial Average rose 0.6% and the S&P 500 rose 0.7% and 0.5% while futures on the US Tech 100 rose 0.9%.
- Oil prices rose, with West Texas Intermediate up 1.6% at $37.84, and Brent crude up 1.3% at $40.12
- The benchmark 10-year Treasury yield rose to 0.67%.
- Gold rose 0.6% to $1,975 per ounce.
The chatter around the Fed meeting tipped the US dollar lower, according to Naeem Aslam, chief market analyst at Avatrade.
He said" "It is widely expected that the Fed will strike a dovish tone that could be positive for the U.S. stocks, but it could bring more weakness for the mighty
At last month's Jackson Hole meeting, the Fed said it will now target an inflation rate that averages 2% over time, differing from its previous goal of maintaining inflation at 2%, and markets were eagerly awaiting more details, according to Aslam.
The US dollar index fell as US futures creeped up. The US dollar is usually considered as a safe haven asset. It therefore can move lower as investors become more confident and flock to the equity market.
Halley said: "The dollar index fell 0.23% to 93.05, leaving it near the middle of its two-month range."
Gold hit a more than a two-week high of $1,975 on Tuesday as the weak dollar lent support to the precious metal. Gold is quoted in US dollars, a weaker dollar therefore makes it cheaper to buy bullion.
Hopes on the early development of a
On Monday, AstraZeneca resumed a phase-three trial in the UK after pausing it last week because of safety concerns. Pfizer, the largest pharmaceutical company in the US also said Sunday that a vaccine could be ready for approval as soon as next month and may be distributed by the end of the year.