Wall Street seemed to be regaining its balance at the end of the biggest retirement in 11 weeks.
US stocks rose and treasury yields fell for a second day in a row, as more subdued commodity prices helped allay concerns about inflation risks.
Energy and tech stocks led the S&P 500, which fell the most on Wednesday since February. The highly technological Nasdaq 100 outperformed the broader index, suggesting that the market rally is gaining momentum, after a murderous week in which mounting price pressure hit stocks. The two indexes still ended the week in the red. A rise in European equities was led by cyclical industries. MSCI Inc.’s Asia-Pacific equity indicator rose more than 1%.
“People are very optimistic economically,” said Simon Maughan, head of alpha trading at Liquidnet. “By the end of the year, the market is still on an upward trajectory. Clearly, sentiment is extremely optimistic about pent-up demand. “
Markets appear to be regaining their equilibrium at the end of their biggest pullback in 11 weeks, with the focus on the benefits of an economic rebound that prevails over the negative side effects of inflation, for now.
Federal Reserve policy is in the right place right now, said Cleveland Fed Chairman Loretta Mester, while downplaying data signals that she says will be volatile as the economy reopens.
This may help reinvigorate the reflationary discourse of choosing value stocks tied to economic growth over pandemic favorites at home. Walt Disney Co. fell after results that showed a slowdown in the growth of the Disney + streaming service.
Treasuries gained after a report showed US retail sales stagnated in April after rising sharply the month before. The dollar remained weaker against all of its Group of 10 peers.
“The disappointing retail sales figures shouldn’t come as much of a surprise given that last month included stimulus money hitting bank accounts,” said Mike Loewengart, managing director of investment strategy at E * Trade Financial. “This probably confirms the view that the decline we have experienced this week is a buying opportunity as all sectors march towards a full recovery.”
Iron ore continued its fall after a record amid China’s efforts to fight the surge in prices, with the metal expected to experience the biggest two-day drop since 2019. Oil erased an earlier drop, reducing its weekly loss.
Bitcoin traded above $ 50,000, reversing part of its collapse following Tesla Inc.’s decision to halt purchases using digital currency.
Here are some of the main movements in the markets:
- The S&P 500 rose 1.5%, more than any closing gain since March 26 at 4 p.m. New York time
- The Nasdaq 100 rose 2.2%, more than any closing gain since March 11
- The Dow Jones Industrial Average rose 1.1%
- MSCI World Index rose 1.6%, more than any closing gain since March 1
- Bloomberg Dollar Spot Index fell 0.3%, more than any closing loss since May 7
- The euro rose 0.5% to $ 1.2143
- The British pound rose 0.3% to $ 1.4098
- The Japanese yen rose 0.1% to 109.35 per dollar
- The yield on 10-year Treasuries fell three basis points to 1.63%
- Germany’s 10-year yield fell one basis point, more than any closing loss since May 4
- Britain’s 10-year yield fell four basis points, more than any closing loss since May 4
- West Texas Intermediate crude rose 2.4%, highest since May 4
- Gold futures rose 1% to $ 1,843 an ounce