The CNN Money Fear & Greed Index, a barometer of market sentiment, showed a glimmer of improvement on Tuesday, though it remained firmly rooted in the ‘Fear’ zone. This comes after U.S. stocks experienced a positive day on Monday, buoyed by investor anticipation surrounding the upcoming U.S. presidential election results.
The market is also keeping a close eye on the Federal Reserve’s interest rate decision scheduled for Thursday. Economists and investors are eagerly awaiting the Fed’s announcement, which could significantly impact market direction.
In addition to the upcoming election and the Fed’s rate decision, recent economic data has provided mixed signals. The trade deficit in the U.S. widened to $84.4 billion in September, hitting its highest point since April 2022 and surpassing market expectations. However, the ISM services PMI rose to 56 in October, reaching its highest level since August 2022. This indicates a strong expansion in the services sector.
Individual company performance also played a role in shaping market sentiment. Yum! Brands, Inc. (YUM) reported disappointing third-quarter results, while Vimeo Inc. (VMEO) saw its shares soar by around 45% on Tuesday following better-than-expected third-quarter financial results and strong fourth-quarter sales guidance.
Across the S&P 500, all sectors ended the day in positive territory, with consumer discretionary, industrials, and utilities stocks leading the charge. The Dow Jones Industrial Average closed up by approximately 427 points, settling at 42,221.88. The S&P 500 gained 1.23% to 5,782.76, while the Nasdaq Composite climbed 1.43% to close at 18,439.17.
Investors are now focused on earnings reports from several companies, including CVS Health Corporation (CVS), Johnson Controls International plc (JCI), and Qualcomm Inc. (QCOM), which are expected to be released today.
The CNN Money Fear & Greed Index currently stands at 43.5, which places it firmly within the ‘Fear’ zone. This index is designed to gauge market sentiment, with the premise being that higher fear generally depresses stock prices, while higher greed has the opposite effect. The index is calculated using seven equally weighted indicators, ranging from 0 to 100, where 0 represents extreme fear and 100 represents maximum greediness.
