Equities, commodities climb after China announces stimulus

After China announced stimulus measures for its economy, a widely-followed global stock index reached a new record high. Copper prices also hit their highest level in 10 week on Tuesday.

Mining stocks drove the Dow and S&P 500 to record-breaking closing highs. The Chinese yuan reached a 16-month-high against the U.S. Dollar, and oil prices rose to a 3-week-high on the news that China was the world's largest crude importer.

Pan Gongsheng, Governor of the People's Bank of China, announced plans to reduce borrowing costs and inject additional funds into China's economy as well as ease mortgage repayment burdens for households. This announcement included a 50 basis-point reduction in the banks' reserve ratios.

Copper and lithium miners increased on Wall Street. Freeport-McMoRan grew 7.9%. Southern Copper gained 7.2%. Albemarle advanced 1.99%. Arcadium Lithium rose 3.2%.

U.S. listed shares of Chinese companies such as Alibaba increased 7.9%. PDD Holdings increased by 11.8%. Li Auto grew by 11.4%.

Zachary Hill is the head of portfolio management for Horizon Investments, a Charlotte-based firm.

The Dow Jones Industrial Average increased 83.57, or 0.20% to 42,208.22. The S&P 500 gained 14.36, or 0.25% to 5,732.93 while the Nasdaq Composite grew 100.25, or 0.56% to 18,074.52.

S&P 500 fell briefly in the early morning trading session after data revealed that U.S. Consumer Confidence unexpectedly dropped in September amid growing concerns over the state of the labor markets.

Investors are looking to see what the Federal Reserve will do next after it began its latest easing program last week by cutting interest rates by 50 basis points.

The MSCI index of global stocks rose by 4.51 points or 0.54% to 844.56 and reached a new record. The STOXX 600 rose by 0.65%.

Brent crude reached $75.17 a barrel, an increase of $1.27. U.S. Crude rose by $1.19, to $71.56 per barrel.

The price of three-month copper at the London Metal Exchange rose by 2.7%, to $9,802 per metric ton, by 1615 GMT, after reaching its highest level since July 15, which was $9,825. China is the world's largest metal consumer.

Spot gold increased 1.15%, to $2.658,69 per ounce.

The Chinese Yuan gained 0.65% to reach 7.017 dollars after reaching 7.0156 in the previous session.

After the Consumer Confidence data, the U.S. Dollar index continued to decline.

The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) fell by 0.57%, while the euro rose by 0.59%, reaching $1.1178. The dollar fell 0.31% against the Japanese yen to 143.15.

U.S. Treasury yields have fallen

In choppy trading, U.S. data such as the weak confidence numbers prompted speculation that the Fed may make another large rate cut during the November policy meeting.

LSEG data show that U.S. Rate Futures now price in a 62% probability of a second rate cut of up to 50 bps during the November meeting. This is an increase from Monday's 54%. On Tuesday, the more traditional 25-bp rate cut was a 38% chance.

In the afternoon, the benchmark yield on 10-year bonds was down slightly at 3.733%. It had earlier reached a high of 3.81%.

(source: Reuters)