Stocks extended gains to set fresh record highs on Tuesday as investors took in another hefty set of earnings and economic data.
All three major U.S. equity indexes moved higher. The S&P 500 and Dow each set all-time intraday highs, with equity investors proving resilient even in the face of ongoing supply chain challenges and elevated inflationary pressures. New data Tuesday showed consumer confidence rose for the first time in four months in October, with consumers' spending plans picking up even as inflation expectations reached a 13-year high.
The Nasdaq Composite also rose, coming within 1% of its own record high. Shares of Tesla (TSLA) stead after the stock's market capitalization reached $1 trillion for the first time ever on Monday. Technology stocks also gained broadly as investors awaited earnings results from the likes of Alphabet (GOOGL), Twitter (TWTR) and Advanced Micro Devices (AMD) on Tuesday, and other tech heavyweights including Amazon (AMZN) and Apple (AAPL) later this week.
Facebook (FB) shares turned lower after company posted mixed third-quarter results and revenue guidance that missed expectations. The social media giant also said it would be changing its reporting structure to break out Facebook Reality Labs in its own separate segment, following the company's ample investment in building out its virtual reality products and metaverse. It noted it expected investment in Facebook Reality Labs to reduce overall operating profit by about $10 billion this year.
Stocks have jumped so far in October as investors at least temporarily shook off concerns over rising input and labor costs, and widespread shortages, for companies across a broad range of industries. Even given these pressures, many companies have managed to exceed Wall Street's earnings expectations in their latest quarterly results, which largely reflected companies' abilities to absorb or pass on heightened costs at least for the time being.
With earnings rolling in this month, the S&P 500 has so far gained 6% in October, and is heading for its best month since November 2020.
"The S&P 500 Index has gained more than 20% so far this year, making more than 50 record highs along the way. Certainly nobody should be upset with that return if that was all 2021 brought us," Ryan Detrick, Chief Market Strategist for LPL Financial, wrote in an email. "However, we see signs that there could be more gains to come in the final two months of the year."
"Seasonal tailwinds, improving market internals, and clear signs of a peak in the Delta variant all provide potential fuel for equities heading into year-end, and we maintain our overweight equities recommendation as a result," he added.
4:06 p.m. ET: S&P 500, Dow extend gains to set fresh record highs as market awaits Alphabet, Microsoft earnings
Here were the main moves in markets as of 4:06 p.m. ET:
S&P 500 (^GSPC): +8.31 (+0.18%) to 4,574.79
Dow (^DJI): +15.73 (+0.04%) to 35,756.88
Nasdaq (^IXIC): +9.01 (+0.06%) to 15,235.72
Crude (CL=F): +$0.86 (+1.03%) to $84.62 a barrel
Gold (GC=F): -$12.10 (-0.67%) to $1,794.70 per ounce
10-year Treasury (^TNX): -1.6 bps to yield 1.6190%
3:30 p.m. ET: Investors are still piling into names in the "reflation" trade: Strategist
With the market trading at all-time highs, fund flows are still pointing to investors' propensity to tilt toward areas of the market that would stand to benefit from persistent inflationary trends, according to at least one strategist.
"The market has rebounded pretty significantly, especially given September's performance in the equity markets. And yes that's also been followed by flows into ETFs," Gargi Chaudhuri, head of iShares Investment Strategy, Americas at BlackRock, told Yahoo Finance Live on Tuesday. "I would say what we're focusing on more recently is especially as Q4 takes hold, is more of that reflationary theme [playing] out in the market, so a lot of flows into financial ETFs ... a lot of flows into Treasury and inflation-protected securities."
"And investors are also looking for sort of the value themes, themes that make sense as interest rates move higher in the backdrop of higher inflation," she added.
10:08 a.m. ET: Consumer confidence unexpectedly jumped in October: Conference Board
Consumer confidence posted a surprise rise in October from September, with optimism among Americans moving higher as coronavirus cases related to the Delta variant began to retreat.
The Conference Board's consumer confidence index rose to 113.8 in October from 109.8 in September. This came in higher than the 108.0 consensus economists were looking for, according to Bloomberg data. It also marked the first monthly increase in confidence since June.
“Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a press statement. "The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October—a sign that consumer spending will continue to support economic growth through the final months of 2021."
Consumers also at least temporarily looked through rising inflation expectations, with short-term expectations for price increases reaching a 13-year high, Franco added. And beneath the headline consumer confidence index, subindices tracking consumers' assessments of current conditions as well as expectations for the next six months for the labor market and broader business environment also improved relative to September.
10:00 a.m. ET: New home sales surged by the most since July 2020 in September
Sales were up 14.0% in September compared to August, far exceeding consensus expectations for a 2.2% rise, according to Bloomberg data. This brought new home sales to a seasonally adjusted annualized rate of 800,000, or the highest since March. In August, new home sales were downwardly revised to reflect a monthly drop of 1.4%, compared to the rise of 1.5% previously reported.
New home sales in the Northeast posted by far the biggest rise during the month, with these rising by 32.3%. This was followed by a 17.5% jump in new home sales in the South, and an 8.2% advance in the West. The Midwest region of the U.S. saw sales drop by 1.5% during the month.
9:31 a.m. ET: Stocks open higher
Here's where markets were trading after the opening bell:
S&P 500 (^GSPC): +18.79 (+0.41%) to 4,585.27
Dow (^DJI): +108.89 (+0.3%) to 35,850.04
Nasdaq (^IXIC): +81.84 (+0.54%) to 15,309.07
Crude (CL=F): +$0.02 (+0.02%) to $83.78 a barrel
Gold (GC=F): -$6.30 (-0.35%) to $1,800.50 per ounce
10-year Treasury (^TNX): -0.3 bps to yield 1.632%
9:03 a.m. ET: Home prices jumped by the most on record in August: Case-Shiller
U.S. home prices increased at a faster rate in August than in July, reaching yet another record-high clip as tight inventory levels and materials and labor shortages further squeezed affordability in the housing market.
S&P CoreLogic's Case-Shiller Home Price Index for August rose at an 19.84% rate compared to the same month in 2020. This accelerated from July's year-over-year increase of 19.75%.
The 20-City Composite Index, tracking home price changes in the largest U.S. metropolitan areas, increased at a 1.17% month-on-month clip in August, and at a 19.66% year-over-year rate. Both pulled back slightly compared to the prior month. In July, the 20-City Composite Index had risen by 1.53% on a monthly basis, and by 20.02% on an annual basis.
7:34 a.m. ET Tuesday: Stock futures extend gains after Dow, S&P 500 post record highs
Here's where the markets were trading Tuesday morning:
S&P 500 futures (ES=F): +19.5 points (+0.43%), to 4,577.50
Dow futures (YM=F): +118 points (+0.33%), to 35,738.00
Nasdaq futures (NQ=F): +95.25 points (+0.61%) to 15,591.00
Crude (CL=F): +$0.25 (+0.3%) to $84.01 a barrel
Gold (GC=F): -$1.60 (-0.09%) to $1,805.20 per ounce
10-year Treasury (^TNX): -1.8 bps, yielding 1.617%
6:03 p.m. ET Monday: Stock futures tick up
Here's where markets were trading as the overnight session kicked off:
S&P 500 futures (ES=F): +6 points (+0.13%), to 4,564.00
Dow futures (YM=F): +22 points (+0.06%), to 35,642.00
Nasdaq futures (NQ=F): +33 points (+0.21%) to 15,528.75
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter