U.S. stocks traded mixed Tuesday, although volumes are beginning to thin ahead of the Thanksgiving holiday break, as investors re-set interest rate expectations following President Joe Biden's decision to name Jerome Powell to a second term as Federal Reserve Chairman.
Oil prices were also in focus after the White House unveiled plans to release 50 million barrels of crude from the Strategic Petroleum Reserve --- as part of a coordinated move with China, India, South Korea, Japan and the United Kingdom -- in an effort to tame surging energy costs.
Powell's nomination, alongside prospective Vice Chair Lael Brainard, has boosted bets on both a near-term acceleration of the Fed's tapering strategy, as well as those linked to a 2022 rate hike, in the face of the fastest pace of domestic inflation in more than three decades.
That's lifted the dollar index, which tracks the greenback against a basket of six global currencies, to its highest levels in 16 months, while bumping benchmark 2-year note yields to a March 2020 high of 0.624% in ealry New York trading. The CME Group's FedWatch tool now suggests a 78% chance of a June rate hike, up from around 65% a week ago. Chances of a May hike are now at 60%.
On Wall Street, the Dow Jones Industrial Average gained 22 points in the opening hour of trading, while the S&P 500 dipped 5.5 points and the tech tech-focused Nasdaq Composite fell 80 point dip as benchmark 10-year Treasury note yields climbed to 1.65% ahead of a seven-year note auction later in the session.
In the oil markets, WTI futures contracts for January delivery, which are tightly corelated to U.S. gas prices, were marked $1.14 higher from last night's close at $77.90 per barrel following news of the SPR release.
Brent crude contracts for January, the global pricing benchmark, rose $1.44 to $81.14 per barrel.
In terms of individual stocks, Zoom Video Communications (ZM) - Get Zoom Video Communications, Inc. Class A Report slumped 16.2% as growth concerns offset stronger-than-expected third quarter earnings and a robust full-year sales outlook.
Xpeng (XPEV) - Get Xpeng Inc Report shares jumped 11.75% after the China-based electric carmaker, and upstart Tesla (TSLA) - Get Tesla Inc Report rival, posted stronger-than-expected third quarter earnings and said year-end deliveries would top Street forecasts.
Best Buy (BBY) - Get Best Buy Co., Inc. Report tumbled 15.2% after it posted stronger-than-expected third quarter earnings but forecast weaker same-store sales over the holiday period as supply chain disruptions ripple through into the retail electronics sector.
Dollar Tree (DLTR) - Get Dollar Tree, Inc. Report shares gained 4.4% after it posted third quarter earnings hat were largely in-line with Street forecasts, noting it plans to rollout price increases that will take its midpoint to $1.25 early next year.
In overseas markets, Europe's Stoxx 600 was marked 0.82% lower by mid-day trading in Frankfurt, pulling the regional benchmark to a three-week low, amid ongoing concerns over the rise in coronavirus infection rates and the prospect of tighter monetary policy from the European Central Bank.
In Asia, the region-wide MSCI ex-Japan index was marked 0.45% lower on the session as stocks followed last night's sell-off on Wall Street, while the Nikkei 225 in Tokyo was closed for the nation's Labor Day Thanksgiving holiday.