US stocks remain on track to post strong monthly gains

Major US equity indices witnessed a rather muted opening on Tuesday as investors continue to track earnings season to justify current stretched valuations. 

Tepid opening gains lacked any strong conviction amid renewed doubts over the pace of tax cuts. News report that the House of Representatives is considering phasing in a cut to corporate taxes rather than enacting them immediately now seems to be weighing on investors’ confidence. 

Nevertheless, all the three major indices remain on track to post strong monthly gains, with the Dow Jones Industrial Average gaining over 4.0% and the broader S&P 500 Index looking at a rise of around 2.0% for October. 

Meanwhile, tech-heavy Nasdaq Composite Index continued with near-term relative outperformance and remains poised for gains in excess of 3.0%, underpinned by strong corporate earnings from technology stocks.

Looking ahead, focus would remain on the outcome of a two-day FOMC meeting, starting today, which would provide policymakers' view over the health of the economy and inflation trajectory. 

Also in focus would be the US President Donald Trump's decision over the next Fed Chair, expected to be announce on Thursday, and the keenly watched US monthly jobs report (NFP), due on Friday.