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Stocks Move Mostly Higher After Seeing Initial Weakness - U.S. Commentary


Stocks have moved mostly higher over the course of morning trading on Tuesday after initially moving to the downside. The major averages have all climbed into positive territory following the mixed performance seen in the previous session.

Currently, the major averages are just off their highs of the session. The Dow is up 24.55 points or 0.1 percent at 26,511.33, the Nasdaq is up 53.62 points or 0.7 percent at 7,789.57 and the S&P 500 is up 7.75 points or 0.3 percent at 2,892.18.

The rebound on Wall Street comes as treasury yields have turned lower after extending a recent upward trend in early trading.

Upbeat economic data has pushed treasury yields higher in recent sessions, leading to concerns the Federal Reserve may raise interest rates more aggressively than previously anticipated.

The ten-year yield reached its highest level in well over seven years last Friday, while the thirty-year bond yield climbed to its highest level since 2014.

Meanwhile, traders have largely shrugged off news the International Monetary Fund has lowered its forecast for U.S. and Chinese economic growth.

Citing the "negative effect of recent tariff actions," the IMF said economic growth in the U.S. and China is now expected to slow to 2.5 percent and 6.2 percent, respectively, next year.

Overall trading activity may be somewhat subdued, as a lack of major U.S. economic data is keeping some traders on the sidelines following the holiday on Monday.

In the coming days, traders are likely to keep a close eye on reports on producer and consumer prices as well as comments by several Federal Reserve officials.

Tobacco stocks have shown a substantial move to the upside in morning trading, extending the rally seen in the previous session. The NYSE Arca Tobacco Index has surged up by 7.1 percent, reaching a new record intraday high.

Natural gas and retail stocks are also seeing notable strength on the day, while weakness is visible among chemical and gold stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index tumbled by 1.3 percent, while Hong Kong's Hang Seng Index dipped by 0.1 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the French CAC 40 Index is up by 0.1 percent and the German DAX Index is up by 0.3 percent.

In the bond market, treasuries have climbed back near the unchanged line after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 3.218 percent.

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