U.S. stocks moved higher Monday, while the dollar slipped lower against its global peers and Treasury yields edged north, as investors braced for a crucial week on Wall Street while closely tracking the escalating conflict in the middle east.
Global investors aren't yet in 'risk-off' mode as a result of the war in Israel, which is massing troops on the border of Gaza and preparing for a ground invasion following last week's attacks from Hamas, but they are moving cautiously.
Benchmark 10-year Treasury note yields, however, edged higher in early New York dealing To 4.712% as the prospect of higher Fed rates, as well as renewed inflation risks, trumped safe-haven flows.
The U.S. dollar index, another traditional 'flight-to-safety' trade, was marked 0.17% lower at 106.47 against a basket of its global peers while 2-year note yields were up 2 basis points at 5.084%.
Oil prices, as well, have yet to react to the weekend events, which have included warnings from Iran, a key weapons supplier to Hamas, that it could become involved in the conflict should Israel mount its ground assault on Gaza over the coming days.
Brent crude futures for December delivery, the global pricing benchmark, were last seen trading 41 cents higher at $91.30per barrel in early New York dealing while WTI crude contracts for November, which are linked to U.S. gasoline prices, added 51 cents to $88.20 per barrel.
With the conflict isolated, at least for the moment, investors are likely to focus instead on the prospects for another Fed rate hike following the emergence of renewed inflation risks last week and minutes from the central bank's September policy meeting that suggest the need for at least one more increase between now and the end of the year.
To that end, Thursday's slate of Fed speakers, including an address to the Economic Club of New York by Chairman Jerome Powell, will be keenly watched for clues as to the Fed's near-term rate path.
A busy earnings week also lies ahead, with 56 S&P 500 companies set to report September quarter earning over the next five days, following on from a solid start last week paced by better-than-expected updates from UnitedHealth Group (UNH) -) and JPMorgan Chase (JPM) -).
Data from the London Stock Exchange Group suggests collective S&P 500 profits are likely to rise 2.2% from last year to a share-weighted $468.8 billion, paced by the communications services sector (which includes Google parent Alphabet (GOOGL) -) and Facebook owner Meta Platforms (META) -)).
Heading into mid-day trading on Wall Street, the S&P 500, which is up 0.93% for the month, was up 42 points, or 0.95%, while the Dow Jones Industrial Average gained 311 points.
The Nasdaq was up 185 points, although gains for the tech-focused index held down by slumping chip stocks following a report that the U.S. is ready to tighten restrictions on the sale of advanced semiconductors and technologies to China.
In overseas markets, Europe's Stoxx 600 was marked 0.27% higher by the close of trading in Frankfurt while Britain's FTSE 100 ended 0.41% higher in London.
In Asia, Japan's Nikkei 225 slumped just over 2% as markets played catch-up to the Friday sell-off on Wall Street, while the region-side MSCI ex-Japan benchmark fell 0.68% into the close of trading.
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