Rebound in Oil Prices and Shares of Energy Companies Lead Gains

U.S. markets had a powerful start to the new month and quarter, as downward correction in yields and U.S. dollar boosted demand for riskier securities. There have been, however, reports and rumors swirling that investment bank Credit Suisse may be in serious financial trouble. Global stock markets were mostly lower overnight. Markets in mainland China were closed for a holiday. U.S. stock indexes are firmer at midday, on corrective rebounds after hitting new for-the-move lows last Friday.

A bigger-than-expected drop in the U.S. manufacturing activity increased optimism the Fed may back off of its aggressive monetary tightening policy to avoid a recession. The Dow, S&P 500 and Nasdaq soared more than 2%.

Energy sector companies dominated the list of best-performing stocks in the S&P 500 as oil futures climbed in anticipation OPEC+’s decision to cut production. Chevron (CVX) led the Dow higher, with shares rising 5.5%. Shares of Boeing (BA), Caterpillar (CAT) and Intel (INTC) jumped 4%. Every stock in the average except Johnson & Johnson (JNJ) was in the green, with 14 gaining 3% or more.

Hi-tech stocks also rebounded, with shares of all the FAAMG companies higher. Also, as metal prices advanced, shares of mining companies such as Freeport-McMoran (FCX) and steelmaker Nucor Corporation (NUE) soared.

Сommoditywise, crude oil prices are trading higher as Brent crude futures rose 1.5% to $90.96 per barrel, while U.S. WTI crude futures rose 3.3% to trade at $85.36 a barrel. The API’s data on crude oil stocks will be released today.

Gold futures rose 0.8% to trade at $1,714.80 an ounce, while silver is edging higher 1.3% at $20.95 an ounce.

European markets are trading higher today. As of 4:40 p.m. CET, the Stoxx Europe 600 Index jumped 2.8%, British FTSE 100 rose 2.47% while the French CAC 40 Index jumped 3.84%, while the German DAX surged 3.37%.

The producer price inflation in the Eurozone surged to a new record high of 43.3% YoY in August following a revised 38.0% in July. Industrial producer prices in the Eurozone jumped 5% MoM in August. In the entire European Union, the benchmark moved up by 4.9% on a monthly basis. Over the previous 12 months, producer prices were up by 43.3% in the euro area, and 43% in the entire Union. The energy sector led the hike with an 11.8% increase in the euro area and an 11.9% hike in the EU. On an annual comparison basis, prices of energy skyrocketed both in the Eurozone and in the block, soaring by 116.8% and 115.4% respectively.

Asian markets traded higher today. Japan’s Nikkei 225 rose 2.96%, Australia’s S&P/ASX 200 surged 3.8%, while India’s S&P BSE Sensex advanced by 2.1%. The Reserve Bank of Australia increased its benchmark cash rate by 25 bps to 2.6% at its October meeting. Job openings in Australia fell by 0.5% MoM in September, while building permits jumped 28.1% MoM to 17,497 units in August.