U.S. Stocks Close On Firm Note As Treasury Yields Drop

(RTTNews) - After opening on a slightly subdued note, U.S. stocks climbed higher and held firm right through the day's session on Tuesday to eventually close with solid gains.

Despite concerns about the ongoing war in the Middle East, the mood in the market remained positive as dovish comments from Federal Reserve officials lowered expectations for further interest rate hikes and pushed down bond yields.

The yield on benchmark 10-year Treasury Note dropped to around 4.65 percent as investors chose to pick up some safe-haven assets amid geopolitical concerns.

The major averages all ended on a firm note. The Dow settled with a gain of 134.65 points or 0.4 percent at 33,739.30. The S&P 500 climbed 22.58 points or 0.52 percent to 4,358.24, and the Nasdaq advanced 78.60 points or 0.58 percent to 13,562.84.

PepsiCo climbed nearly 2 percent after the company's earnings and revenue beat expectations.

Bank of America, Tesla, Boeing, Coca-Cola, 3M, American Express, Walmart, Home Depot, Intel and Verizon closed notably higher.

Fed Bank of Atlanta President Bostic reiterated that he doesn't think policymakers need to raise interest rates any further.

Fed Vice Chair Philip Jefferson said on Monday that the central bank is "in a position to proceed carefully in assessing the extent of any additional policy firming that may be necessary."

"Higher term premiums result in higher term interest rates for the same setting of the fed funds rate, all else equal. Thus, if term premiums rise, they could do some of the work of cooling the economy for us, leaving less need for additional monetary policy tightening," Dallas Fed President Lorie Logan said.

The International Monetary Fund (IMF) downgraded the global growth forecast for next year, saying the projections are weakest in decades, while the likelihood of a soft-landing has increased with growing divergences amid modestly easing inflationary pressures.

Global growth was forecast at 3.0 percent this year, the IMF said in its October World Economic Outlook report released on Tuesday at Marrakech, Morocco, where the lender is holding its annual meeting.

Growth forecasts for the U.S. economy for this year and next were raised to 2.1 percent and 1.5 percent, respectively.

Investors now look ahead to the release of U.S. CPI data and minutes of the Fed's September monetary policy meeting this week for further direction.

In overseas trading, Asian stocks ended mostly higher on Tuesday as oil prices slipped following the previous session's strong rally, and the dollar and bond yields retreated on Fed rate pause hopes.

European stocks closed on a buoyant note on Tuesday as investors indulged in hectic buying right through the day's session, as bond yields fell after dovish comments from Federal Reserve Officials.

Reports that China will announce additional stimulus to boost the nation's economy contributed as well to the upbeat mood in the European markets today.

The pan European Stoxx 600 climbed 1.96 percent. The U.K.'s FTSE 100 surged 1.82 percent, Germany's DAX gained 1.95 percent and France's CAC 40 advanced 2.01 percent.