Stocks rebound globally as US yield stabilises; Dow Jones, S&P gain

Global stocks advanced on Tuesday as positive corporate earnings spurred some investor risk appetite, although caution remained given the war in West Asia and looming make-or-break data for the outlook for US interest rates.

Oil fell further after a flurry of weak economic data sketched a bearish picture which could weigh on oil demand, eclipsing worries that the Israel-Hamas war could escalate into a wider conflict in the crude-exporting region.

The benchmark US 10-year Treasury yield remained high on Tuesday, though it was short of the 5 per cent level. The yield was up 2.1 basis points to 4.859 per cent. It breached a 16-year high of 5 per cent on Monday but quickly tumbled.

The US dollar gained, while bitcoin, which on Monday staged its biggest one-day rally in a year with a gain of 10.2 per cent, was up another 4 per cent.

On Wall Street, upbeat forecasts from Verizon, Coca-Cola and others boosted optimism about corporate America's health in the face of slowing economy and higher inflation. The Dow Jones Industrial Average rose 0.87 per cent, the S&P 500 gained 0.85 per cent, and the Nasdaq Composite added about 1 per cent.

The MSCI All-World index rose 0.6 per cent, marking its first daily rise since October 17, while an index of Asia-Pacific shares outside Japan edged above a one-year low.

Monthly surveys of business activity showed a decline in the euro zone and Britain in early October, ahead of a separate report due out later for the US. “The only real growth that is out there is in the United States,” TraderX strategist Michael Brown said, flagging the monthly US purchasing manager index survey due later. “The risks facing the euro zone were pretty significant already, before everything kicked off in West Asia, but now we are potentially looking at a second consecutive winter where the euro zone is having to grapple with an energy shock.”

The STOXX 600 added 0.6 per cent, as declines in banking shares such as Barclays were offset by gains in the likes of luxury group LVMH and Swiss computer parts maker Logitech.