Major US equity indices opened with modest gains on Tuesday and recovered a part of previous session’s retracement slide from record highs.
With investors looking past the recent escalation of US-China trade tensions, a goodish uptick in energy and banking stocks remained supportive of the mildly positive move during the opening hour of trade.
The ongoing upsurge in oil prices, with WTI crude oil hitting four-year highs, underpinned shares of energy companies, while bank stocks rose in anticipation of a Fed rate hike action on Wednesday.
The uptick, however, seemed lacking conviction as investors now seem to refrain from placing aggressive bets ahead of the highly anticipated FOMC decision on Wednesday.
Higher interest rates tend to dampen demand for perceived riskier assets – like equities and hence, it would be prudent to wait for the latest monetary policy update before positioning for the next leg of directional move.
Market participants also remained concerned that the US-China trade situation might lead to a full-blown trade war and have a severe impact on global growth, which could potentially act as a headwind for the markets.
At the time of writing this report, the Dow Jones Industrial Average climbed over 45-points to 26,608 and the broader S&P 500 Index was up by around 2-points to 2,922. Meanwhile, tech-heavy Nasdaq Composite Index underperformed the markets and gained nearly 5-points to 7,998.
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