MW: U.S. stock futures pare gains as debate relief rally fades
U.S. stock futures rose in early trade Tuesday on cheer over an apparent win for Hillary Clinton over Donald Trump in the first U.S. presidential debate, but pared those gains as a slide in oil prices accelerated.
Futures for the Dow Jones Industrial Average YMZ6, +0.16% were up 6 points to 18,019.00 after being up by triple digits earlier in the premarket session. Futures for the S&P 500 index ESZ6, +0.20% picked up 2.1 points, or 0.1%, to 2,141.75. Futures for the Nasdaq-100 index NQZ6, +0.20% added 21.25 points, or 0.4%, to 4,836.25.
Earlier, futures for each of those indexes climbed 0.6% in the wake of the first of three debates between Democratic candidate Clinton and her Republican rival. Stocks in Europe and Asia also advanced, but also lost ground as the initial cheer faded.
Read: At debate, Trump and Clinton clash on how to remake the economy
“Equities have reversed a strong start and decent overnight bounce,” said Accendo Markets analyst Mike van Dulken in a note.
Gains for U.S. futures were being eclipsed by intensifying fears about Deutsche Bank, as well as by “oil remaining volatile as we get snippets from the OPEC-led Algiers meeting,” he added.
Oil prices CLX6, -1.85% LCOX6, -1.94% on Tuesday were down more than 1% after Iran and Saudi Arabia poured cold water on hopes for a production-cap deal at the oil producers’ meeting this week. The Wednesday meeting, on the sidelines of an energy conference in Algeria, will be “consultative,” both nations said.
On Monday, U.S. stocks ended lower, as concerns about the outcome of the debate weighed on sentiment. After the debate, Accendo noted that it is “still early days” to dismiss Trump’s chances.
“Trump could be setting the bar low for the remaining faceoffs. And he does have a ‘bouncebackability’ that has already helped his campaign get within touching distance of the Oval Office,” Accendo said in a note.
Mexico wave: In another sign suggesting financial markets pegged Clinton as the debate winner, the Mexican peso USDMXN, -1.6490% surged against the dollar on Tuesday. The greenback fell to 19.615 pesos, down from 19.879 pesos late Monday in New York.
The peso has been acting as a gauge of the presidential election sentiment on the theory that a victory for Trump will at the very least result in less trade between the two countries, if not an erection of a barrier on the U.S. southern border.
The U.S. Dollar Index DXY, +0.10% , a measure of the buck’s strength against a basket of six key rivals, was up 0.1% at 95.396.
Economic docket: At 9 a.m. Eastern Time, the Case-Shiller home price index for July is released, followed by the Markit flash services purchasing managers index for September at 9:45 a.m. Eastern.
Then at 10 a.m. Eastern, the consumer confidence reading for September is due, expected to slip back to 99.3 from 101.1 in August, according to economists polled by MarketWatch.
Federal Reserve Vice Chairman Stanley Fischer will give a speech on ‘Why Study Economics’ at Howard University’s Economic Convocation in Washington DC at 11:15 a.m. Eastern.
Stocks to watch: Nike will report earnings after the market’s close.
Other markets: Stocks in Europe SXXP, -0.46% were falling after rising at the open as oil’s slide dragged on the energy sector. In Asia, shares reversed earlier declines as investors reacted to the U.S. presidential debate, with the Nikkei Stock Average NIK, +0.84% closing up 0.8%.
Gold futures GCZ6, -0.35% fell 0.3% to $1,335.80 an ounce.
