The S&P could still hold its own despite the standstill

This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open tells investors everything they need to know, no matter where they are. Do you like what you see? You can log in Here.

Aside from the Nasdaq, markets mostly fell
US markets were mixed on Tuesday. The S&P 500 And Dow Jones Industrial Average fell slightly, but were close to the zero line. However, that is Nasdaq Composite 0.18% added. The pan-European Stoxx 600 index fell 0.21%. German software company SAP rose 2.1% after posting stellar third-quarter results, while Maersk fell 3.1% despite raising its full-year forecast.

Inflation is slowing, but so is growth
According to the International Monetary Fund, most countries in the world have managed to reduce inflation. Headline global inflation will fall to 3.5% a year by the end of 2025 from an average of 5.8% in 2024, the agency said on Tuesday. The IMF forecast global growth of 3.2% in 2024 and 2025, which it called a “stable but disappointing” figure.

Drive forward
Shares of General Motors rose nearly 10% after earnings were announced. The US automaker significantly exceeded Wall Street’s expectations for its third-quarter earnings and sales. Due to these positive results, GM has raised its profit forecast for 2024 – the third time this year.

Norway fund makes $76 billion profit
Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund, reported a profit of 835 billion Norwegian crowns ($76.3 billion) in the third quarter. The fund attributed these figures to a rising stock market, boosted by lower interest rates. Still, the fund’s third-quarter return was 4.4%, 0.1 percentage points below the benchmark set by the Norwegian Ministry of Finance.

[PRO] Politics is just as important as profits
The USA will elect its next president in around two weeks. The environment for businesses and markets will be completely different depending on who becomes the country’s 47th president and which party gains control of Congress. Therefore, Bank of America believes that investors should take an active role in selecting stocks to trade in the election.

The S&P is up more than 22% year-to-date, breaking several record deals on the way to this peak.

Still, the broad-based index’s rise has slowed in recent days. On Tuesday, the S&P was down 0.05%, its first consecutive day of losses since early September.

During the rally break, Barclays wrote: “We now recommend stepping aside. We believe investors are likely to do the same; the risk rally is likely to stall in the next few weeks.”

However, if a fast-moving vehicle stalls, it can still come back to life. Notably, all major US indices are trading above both their 50-day and 200-day moving averages, suggesting they have forward momentum.

In fact, UBS Wealth Management raised its rating on U.S. stocks from neutral to attractive this month. “We believe a no-landing scenario is positive for U.S. and global equities,” said Mark Haefele, chief investment officer at UBS GWM.

There are “signs that the long-term trend growth rate may be higher than previously thought,” Haefele added.

The International Monetary Fund also assumes that growth in the USA will remain robust. In its latest global economic outlook, the IMF raised its estimate for U.S. GDP in 2024 to 2.8% from its forecast of 2.6% in July, while also raising its growth forecast for the country for 2025. It is the only advanced economy whose economic performance was revised upwards by the IMF for both years.

The USA has its consumers to thank for this. “The resilience of consumption is largely the result of robust real wage increases,” the IMF wrote in its report.

With the presidential election looming and equity valuations high, the road ahead could be rocky for markets. But the S&P may continue to insist on climbing the rocky ridges of an ever-rising mountain range.

—CNBC’s Brian Evans, Hakyung Kim, Pia Singh and Samantha Subin contributed to this report.