Floods rise on soft landing optimism, China stimulus By Reuters

(Reuters) – U.S. stock index futures rose on Tuesday as investors were upbeat about a “soft landing” scenario in gold bullion, while cheering a bumper stimulus package from China.

The Dow closed at record highs in the previous session after a survey that signaled steady business activity calmed concerns about an impending recession and as a number of policymakers continued to back policy easing by the Federal Reserve.

Yields on longer-dated Treasuries rose as traders priced in a higher likelihood that the economy would achieve growth with low inflation and unemployment.

However, with shares on the benchmark already trading above long-term averages and clarity still lacking on the size of the Fed’s next move, some investors have steered clear of big deals.

At 5:28 a.m. ET, the Dow E-minis were up 58 points, or 0.14%, the S&P 500 E-minis were up 9.75 points, or 0.17%, and the E-minis were up 61 points or 0.30%.

A market rally following the Fed’s decision to cut rates last week has now set the three major indices for monthly gains, defying the historical trend of average losses in September.

Markets now await remarks from Governor Michelle Bowman later in the day. It voted for a 25 basis point rate cut on signs of lingering price pressures, as opposed to the larger 50 bps rate cut the central bank offered the previous week.

Traders are pricing in the Fed’s November decision to be a coin toss, with bets strongly favoring neither a 50 bps cut nor a 25 bps cut, according to CME Group’s (NASDAQ: ) FedWatch tool.

On the data front, a survey due at 10 a.m. ET is expected to show that consumer confidence improved in September from the previous month. However, the main focus will be on Friday’s August personal consumption expenditure figure.

Among the top movers ahead of the market, listed shares of Chinese firms such as Alibaba (NYSE: ) and PDD Holdings added 5% each, and Li Auto (NASDAQ: ) advanced 7.3% after the world’s second-largest economy, China, unveiled its biggest stimulus since pandemic to pull the economy out of its deflationary funk.

The upbeat mood also boosted miners, with shares of Freeport-McMoRan (NYSE: ) , Southern Copper (NYSE: ) and publicly traded Rio Tinto (NYSE: ) rising 4.6% each as that copper prices have increased.

Visa (NYSE: ) lost 1.6% after a report showed the U.S. Justice Department plans to file a lawsuit against the payments network operator, alleging it has illegally monopolized the country’s debit card market.

Starbucks (NASDAQ: ) fell 2% after Jefferies downgraded the coffee chain to “underperform” from “hold,” while Salesforce (NYSE: ) rose 2.1% after Piper Sandler upgraded the company software to “overweight” from “neutral”.