4:10pm: Stocks hit record highs
The S&P 500 and Dow both notched new record closes as investors digested China's new aggressive stimulus measures and a drop in US consumer sentiment.
The Nasdaq led gains with a 0.6% rise to finish at 18,075, while the S&P 500 climbed 0.3% at 5,733, marking its 41st record close of the year. The Dow added 0.2% to finish at 42,208.
Stocks initially dipped after consumer confidence fell to 98.7 in September, but sentiment improved as Fed officials hinted at further rate cuts, and China's stimulus lifted global markets. Shares of US-listed Chinese companies, including JD.com, surged on the news.
2:05pm: Starbucks may face 'throwaway year'
Starbucks Corp (NASDAQ:SBUX, ETR:SRB) has been downgraded to Underperform by analysts at Jefferies, citing significant challenges ahead for the coffee giant as it adapts to leadership changes and market pressures.
Analysts are concerned about the upcoming fiscal 2025 guidance, which they believe could indicate a "throwaway" year for reinvestment and stabilization rather than growth.
"We think F25 could be a 'throwaway' year of reinvesting, stabilizing, and then attempting to accelerate the business," Jefferies wrote.
Jefferies has also revised its estimates for fiscal 2025, reducing its EPS forecast to $3.65, making it the lowest on Wall Street, compared to the consensus of $3.95.
Shares of Starbucks were trading around $94.55 on Tuesday afternoon.
12:10pm: Markets rebound
Markets edged upwards around the midday point of trading on Tuesday after reacting to the fall in consumer confidence from this morning.
The Nasdaq was leading with gains of around 0.6%, while the S&P 500 was up 0.2% and the Dow around 0.1% higher.
Jamie Cox, Managing Partner for Harris Financial Group, acknowledged that "(i)t's never good to see consumer confidence fall this much.
"Consumers are clearly concerned about the implications of the upcoming election, the increasing conflict around the world, and the stubbornly high cost of food and credit." Cox wrote.
"The Federal Reserve seldom reads the tea leaves correctly on when and how much to cut rates, but 50 seems more correct in light of these data."
11:05am: A consumer-based economy
Markets could use "a breather" and consumer confidence may be the catalyst for more volatility, said Gina Bolvin, President of Bolvin Wealth Management Group, noting that the US is "a consumer-based economy."
The consumer comprises almost 70% of GDP, Bolvin noted.
"Confidence coming in lower than expected is a market catalyst for sure and can drive volatility that we typically see in late September. The last two weeks of September are historically the worst two weeks of the year.
"Keep in mind lower confidence may mean lower consumer spending; less demand will continue to bring down inflation. Over time, this will continue to help the consumer."
10.33am: Consumer confidence dips
Consumer confidence in the States has fallen at its fastest rate in three years this month as fears over job security in the world’s largest economy build.
The Consumer Board’s consumer confidence index came in at 98.7 for September on Tuesday, against August’s upwardly revised reading of 105.6.
This marked the largest decline since August 2021, with metrics covering both future and current labour market and business outlooks falling.
Those aged 35 to 54 reported the largest decline, according to the Conference Board.
“Consumers’ assessments of current business conditions turned negative while views of the current labour market situation softened further,” Conference Board chief economist Dana M. Peterson said.
“Consumers were also more pessimistic about future labour market conditions and less positive about future business conditions and future income.”
The Dow Jones remained in positive territory on Tuesday morning, while the S&P 500 and Nasdaq both fell.
9.48am: Wall Street gains early on
Wall Street opened Tuesday in the green, following markets around the world into positive territory after China unveiled a string of measures to buoy its economy overnight.
The Dow Jones and S&P 500 both climbed early on from record closing values seen on Monday, by 76 and 4 points respectively, as the Nasdaq also ticked up by 40 points.
This follows gains across Asian markets overnight, where China’s Shanghai Composite and CSI300 each added over 4%, as well as throughout Europe during the day.
Aimed at lowering borrowing costs and reducing restrictions on lending, the People's Bank of China unveiled short-term interest rate cuts and lower cash reserve requirements overnight in a bid to reinvigorate the world’s second-largest economy.
Such cuts were dubbed positives for global markets, including for the US where Scope Markets analysts said demand should benefit.
In the US, further data on Tuesday promised to add context around to the health of the economy, including from the housing market.
According to the S&P CoreLogic Case-Shiller US National Home Price index, prices climbed by 5% to a record in July, but growth slowed compared to June’s 5.5% rise.
Consumer confidence data was due later in the day.
7.38am: Dow Jones, S&P 500 set to fall after hitting latest records
Wall Street appeared on course for a negative start on Tuesday after Monday saw the Dow Jones and S&P 500 notch up record closing values.
Futures had both indexes slipping slightly on Tuesday’s opening bell, alongside the Nasdaq, following recent gains on the back of last week’s base interest rate cut.
This had seen the Dow Jones and S&P 500 close at record highs of 42,124 and 5,718 respectively on Monday.
A drop would come despite Chinese plans overnight aimed at buoying the world’s second-largest economy, which will see bank’s cash reserve requirements and interest rates cut.
Scope Markets analyst Joshua Mahony noted the move to “flood” liquidity into the Chinese economy could in turn help to boost demand for US goods there.
However, questions remain over the health of the US economy itself, he pointed out, with eyes on Tuesday set to be fixed on the Conference Board’s consumer confidence survey.
“Coming after last month’s five-month high of 103.3, there is an expectation that we will see further improvements that could allay fears over a notable slowdown in domestic consumption,” Mahony added.
“With Friday also bringing fresh personal spending and personal income data, this week should tell us a lot about the financial health of the average US consumer.”