Australia markets open in 1 hour 41 minutes
  • ALL ORDS

    7,539.10
    -13.00 (-0.17%)
     
  • AUD/USD

    0.7587
    +0.0010 (+0.14%)
     
  • ASX 200

    7,275.30
    -23.20 (-0.32%)
     
  • OIL

    73.28
    -0.02 (-0.03%)
     
  • GOLD

    1,776.40
    -0.30 (-0.02%)
     
  • BTC-AUD

    45,680.20
    +1,353.05 (+3.05%)
     
  • CMC Crypto 200

    837.58
    +50.96 (+6.48%)
     

Stocks Rise to Record With Focus Turning to Fed: Markets Wrap

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3-min read
Stocks Rise to Record With Focus Turning to Fed: Markets Wrap
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- U.S. equities eked out a gain in choppy trading as investors continued to assess the outlook for inflation and the path of Federal Reserve monetary policy. Ten-year Treasury yields held at around the lowest since March.

Friday’s advance of 0.2% came a day after the S&P 500 notched its first all-time high since early May as data showed U.S. consumer price increases in May were largely driven by categories associated with economic reopenings, bolstering the view that inflation pressures may ease later in the year. Treasury yields inched higher, with the 10-year rate still ending the week below 1.5%.

Stocks swung between gains and losses in lighter-than-average trading volume, with gains in technology shares offsetting losses in the health care and real estate sectors. Vertex Pharmaceuticals Inc. fell the most after halting development of a key therapy. The volatility in the U.S. came after global stocks rallied. With the Fed setting a high bar for reconsidering its dovish stance, Thursday’s inflation report ended up stoking risk appetite across the world. Now investors are looking ahead to next week’s policy meeting for clues about the Fed’s next moves with regards asset purchases and interest rates.

“Our base view is still that growth and inflation remain buoyant and supportive of risk assets,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “It’s been interesting to watch rates tick lower and stay lower. That seems to imply the market is believing the Fed is going to remain lower for longer and hold rates there.”

The U.S. central bank’s view that inflationary pressures are temporary has taken hold in global markets, signaling any changes in ultra-accommodative policy would happen very gradually. That approach was also reinforced across the Atlantic Thursday, as the European Central Bank raised its inflation forecast and renewed a pledge to maintain faster emergency bond-buying to sustain the euro area.

Eight of the main 11 S&P 500 industry groups rose on Friday afternoon, led by financial and technology stocks. Vertex fell to the lowest since October 2019 after halting its experimental treatment for an inherited disease that affects the liver and lungs. Its competitor, Grifols SA, climbed the most in seven months in Madrid.

The 10-year U.S. Treasury yield held below 1.5% after falling to as low as 1.43% on Thursday. The dollar rose against all of its major global peers.

European stocks rallied, with the Stoxx 600 gauge posting for a fourth weekly increase, as investors relished the prospects of continued policy support. A rally in emerging markets also underscored the return of risk appetite.

Elsewhere, crude oil prices rose amid an improving demand outlook. The Bloomberg Commodity Index fell from the highest level since 2015.

For market commentary, follow the MLIV blog.

These are some of the main moves in markets:

Stocks

The S&P 500 rose 0.2% to a record high as of 4:04 p.m.The Nasdaq 100 rose 0.3%, climbing for the sixth straight day, the longest winning streak since Dec. 8The Dow Jones Industrial Average was little changedThe MSCI World index rose 0.2% to a record high

Currencies

The Bloomberg Dollar Spot Index rose 0.5%The euro slipped 0.5%The British pound slipped 0.4%The Japanese yen slipped 0.3%

Bonds

The yield on 10-year Treasuries advanced two basis points to 1.45%Germany’s 10-year yield declined two basis pointsBritain’s 10-year yield declined four basis points

Commodities

West Texas Intermediate crude rose 0.7% to the highest on recordGold futures fell 0.9% to $1,878.60 an ounce

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting