Wall Street's Mixed Tuesday: Fed Meeting, Earnings, and Market Moves | Daily Market Analysis

Key events:

• USA - ADP Nonfarm Employment Change (Oct)
• USA - ISM Manufacturing PMI (Oct)
• USA - ISM Manufacturing Prices (Oct)
• USA - JOLTs Job Openings (Sep)
• USA - Crude Oil Inventories
• USA - FOMC Statement
• USA - Fed Interest Rate Decision
• USA - FOMC Press Conference

On Tuesday, Wall Street's primary indices displayed a mixed trend in the morning, but as the day progressed, they experienced a collective uptick. Investors were closely eyeing the Federal Reserve's forthcoming monetary policy update and assimilating the latest earnings reports.

The Federal Reserve commenced a two-day monetary policy meeting, widely anticipated to maintain current interest rates. Market participants were attentive to any hints about the central bank's future strategies in the comments of Fed Chair Jerome Powell.

While some investors awaited the Fed's update, others reacted to disappointing earnings reports and expressed concerns about geopolitical developments.

The Dow Jones Industrial Average climbed by 42.72 points, marking a 0.13% increase, reaching 32,971.68. The S&P 500 registered a gain of 15.01 points, or 0.36%, closing at 4,181.83. Meanwhile, the Nasdaq Composite advanced by 21.30 points, equivalent to a 0.17% rise, closing at 12,810.78.

Within the S&P 500, 9 out of the 11 major sectors were in positive territory. The real estate sector led the gains, surging by 1.6%, while communication services was the biggest loser, experiencing a 0.3% decline.

Notably, all three indices were on track to conclude their third consecutive month with losses.

In the currency markets, the yen faced a significant decline against various currencies on Tuesday. It reached a 15-year low against the euro and established a new one-year low against the dollar. This drop occurred following the Bank of Japan's (BOJ) latest move, which, while seen as a step toward ending years of monetary stimulus, fell short of some investors' expectations for a more substantial shift.

After its two-day policy meeting, the BOJ modified its bond yield control policy once again, aiming to gradually reduce its influence on long-term interest rates. This move marked a further progression in the central bank's efforts to unwind the controversial monetary stimulus it had implemented over the past decade.

In the realm of corporate news, Tesla (NASDAQ: TSLA) celebrated a significant victory on Tuesday. The company won its first US trial over allegations that its Autopilot driver assistant feature was responsible for a fatal accident. This outcome represents a notable win for Tesla amidst ongoing legal challenges related to its autonomous driving technology. Tesla has been actively developing and deploying Autopilot and the more advanced Full Self-Driving (FSD) system, emphasizing their significance to the company's future, while simultaneously facing regulatory and legal scrutiny.

Caterpillar (NYSE: CAT) experienced a 6% decline as the industrial equipment manufacturer reported a narrowing order backlog. This development signals a potential slowdown in equipment demand, overshadowing the positive outcome of its Q3 results, which exceeded expectations on both revenue and earnings.

In the world of precious metals, gold achieved a significant breakthrough, surging past the $2,000 mark in a decisive move toward the end of the previous week. However, this milestone has triggered a wave of corrective sentiment, particularly as some speculators rush to lock in profits following the approximately $200 rally from the $1,810 level recorded on October 6th.

From a technical perspective, gold continues to linger in overbought territory (RSI of 70) on the daily chart, even as its price continues to climb. Last week briefly saw the price dip below this line, but it did not trigger a substantial correction. Instead, buyers swiftly reentered the market towards the week's end, propelling the price to new local highs.

Consumer confidence in October declined for the third consecutive month, albeit by a margin smaller than what economists had anticipated. This dip in consumer confidence aligns with growing concerns about inflation.

Dana Peterson, Chief Economist at The Conference Board, noted that "write-in responses showed that consumers continued to be preoccupied with rising prices in general and for grocery and gasoline prices in particular." These concerns highlight the ongoing impact of inflation on consumer sentiment.

These developments occurred shortly before the Federal Reserve's two-day meeting, which is widely anticipated to conclude with an unchanged decision regarding interest rates.