The Magellan Financial Group Ltd (ASX: MFG) share price is trading higher today amid a better day for ASX financial services shares on Tuesday.
Magellan Financial Group's shares are up 3.73% to $12.24 a share at the time of writing, while the Magellan Global Fund (ASX: MGF) is currently trading flat.
Some of Magellan's peers are also slightly more buoyant today. Insignia Financial Ltd (ASX: IFL) and Virgin Money UK CDI (ASX: VUK) are up 0.94% and 1.61%, respectively.
The S&P/ASX 200 Financials Index (ASX: XFJ) is also 1.2% higher at the time of writing.
Today's rise in the Magellan share price comes amid the company's ongoing share buyback program. In March, the fund manager announced plans to buy back 10 million fully paid ordinary shares from the market, the equivalent of 5.4% of the shares on issue.
The company has issued daily notifications that it's been scooping up its shares ever since.
But there have been no other updates from the company recently. So why are Magellan and other ASX financial shares rising on Tuesday? Let's investigate.
Image source: Getty Images
Australian and US equities rise
The bigger picture is that both Australian and US equities markets overnight are lifting. So for the Magellan share price, and that of its peers, it could be a case of a rising tide lifting all boats.
The S&P/ASX 200 Index (ASX: XJO) is 1.21% higher in Tuesday afternoon trading, gaining more than 1% in the first ten minutes of today's session.
US equities had a bumpy ride overnight with volatility in both the S&P 500 and the NASDAQ Composite indices during trading, but both finished in the green.
The S&P 500 closed 0.69% ahead, while the NASDAQ Composite recorded a 0.76% gain.
Volatility dips before likely rate hike
Curiously, the CBOE Volatility Index dived 2.05% overnight, which suggests that the next US trading session could be a little less bumpy.
This may be the calm before the storm, however, with US interest rates expected to rise at the next United States Federal Reserve meeting later this week (early Thursday morning Australian time).
It's speculated interest rates will increase by a hefty 75 basis points amid worse-than-expected inflation numbers posted last week.
The aftermath of the next rate hike could be a watershed moment for US equities, with some investors believing it could turn the Fed's soft landing into a steep recession.
Thus, how the market responds to the hike may be a valuable indicator of how the rest of the economy feels.
Magellan share price snapshot
Today's share price gain will be welcome news for Magellan shareholders. The company's share price is down 42% year to date and 68% lower over the past 12 months.
That's well below the ASX 200 financial index's loss of 5.6% in 2022 so far and 6.2% in the past year.
The company's market capitalisation is around $2.2 billion.
