US markets gained on Tuesday as lower Treasury yields and positive news from 3M boosted sentiment. Meanwhile, French stocks declined due to rising bond yields and civil unrest. Investors are now turning their attention to upcoming tech earnings, particularly from Meta.
US stock markets moved higher on Tuesday as the 10-year Treasury yield dropped to 5.121%. This dip helped reduce concerns about inflation. Markets are currently pricing in a lower chance of immediate interest rate hikes by the Federal Reserve, with the probability of a 25-basis-point increase next week falling to 17.2%.
3M shares jumped 5.8% after the company raised its full-year profit forecast. The company also announced an expanded partnership with Amazon for data centers, which investors viewed positively as a sign of industrial strength.
Attention is now shifting to the technology sector. Investors are waiting for Meta to report its quarterly earnings on Wednesday. A major question for investors is whether the heavy spending on artificial intelligence is turning into real revenue growth for the industry's largest companies.
In Europe, markets struggled. French stocks fell 0.38% and the broader STOXX 600 index slipped 0.14%. Political unrest in France has worried investors. French government bond yields reached their highest level in over two decades, and the spread between French and German bonds has widened. This shows that institutional investors are moving toward safer assets to avoid potential volatility.
Energy prices cooled down after reaching five-month highs earlier in the session. Brent crude oil prices settled at $108.79, down 0.69%. Traders took profits despite ongoing tensions in the Middle East. Moving forward, investors will watch for more earnings reports to gauge the strength of consumer demand and the overall economic direction.