Stocks are set to open higher on Tuesday, extending recent gains as the S&P 500 (+0.43% to 7807), NASDAQ (+0.54% to 27626) and Dow (+0.52% to 51536) all point to fresh advances. The risk-on tone is broad, with ten of eleven S&P sectors trading higher in extended hours. Overseas bourses reinforced the constructive setup, as the Nikkei 225 jumped 1.05% and the Hang Seng added 1.00%, while European markets posted more modest gains with the DAX +0.50% and FTSE 100 +0.19%.
Technology (+0.91%) is again the engine, led by semiconductors — AMD is up 2.29% and NVDA +1.12%, with MSFT +0.96% and AVGO +0.73% adding support. AAPL is a notable laggard within the group, essentially flat at -0.05%. Communication Services (+0.70%) is the second-best performer as Alphabet (GOOGL +0.37%) and META (+0.22%) participate. On the other side of the ledger, Energy (-0.88%) is the lone decliner, pressured by a 2.48% drop in crude to $87.21; XOM (-1.14%), COP (-1.23%) and MPC (-1.32%) are the weakest names. Gold's 0.96% advance to $4197 suggests some continued appetite for hedges even amid the equity rally.
Monday's data left a mixed imprint. The ISM Services PMI printed 54.9, roughly in line, but the Business Activity subcomponent collapsed to 56.5 from 61.7 (a 5.0-point miss), while the Prices Paid index climbed to 74.0 — a hot inflation signal that keeps the sticky-prices narrative alive. Employment firmed to 50.1, back into expansion. That price pressure matters with a dense inflation calendar ahead: CPI lands October 14 (headline seen accelerating to 3.7% YoY) and PPI on October 15, both of which will frame expectations into the October 28 FOMC decision.
The rates picture is doing little to disrupt sentiment, but the bar for policy easing remains high. Prediction markets assign a 96% probability to no Fed rate cuts in all of 2026 and an 18% chance of a 25 bps hike at this month's meeting, with the current funds rate at 4%. Fed commentary carries added weight today, with scheduled remarks from Williams (1:05 PM ET), Bowman (2:45 PM) and Schmid (5:15 PM), followed by Logan this evening. Note that Fed officials — not any single named chair — should be watched for incremental guidance on the inflation trajectory ahead of Wednesday's FOMC minutes.
Options positioning signals a quiet-but-watchful backdrop. The SPY put/call volume ratio sits at a bearish 1.30 and 25-delta skew of 1.5% shows some downside demand, yet the implied move for the nearest expiry is a contained ±0.6%. Dealer gamma flipped positive on today's read (GEX +88M per 1% move) after five sessions of negative gamma, with the call wall at 785 marking near-term resistance and the put wall at 767 the downside shelf; zero-gamma sits at 774. Net, the setup favors orderly trade near term, but the heavy data slate — ADP weekly employment, the trade balance, and this week's auctions and FOMC minutes — leaves ample room for vol expansion given depressed implied levels.
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