Markets rise as Fed rate hike expectations recede further

Markets were mostly higher on Tuesday.

The S&P 500 rose 0.3 percent, the Nikkei 225 rose 0.3 percent and the Shanghai Composite rose 0.6 percent.

However, the STOXX Europe 600 fell 0.3 percent.

A report from the Institute for Supply Management showing that its US nonmanufacturing index fell to 51.4 last month, its lowest reading since February 2010, boosted stocks by lowering expectations for a Federal Reserve rate hike soon.

The yield on the US 10-year Treasury note fell to 1.544 percent from 1.597 percent on Friday while the US dollar fell.

“Much like its manufacturing cousin, the non-manufacturing ISM poured cold water on expectations for a Fed rate hike later this month, and also called into question the strength of the economy heading into the fall,” said Jennifer Lee, a senior economist at BMO Capital Markets.