World shares hit new highs on Monday as investors welcomed the passage of a U.S. infrastructure spending bill, while crude oil gained on the outlook for energy demand in an expansive global economy.
The benchmark S&P 500 index and the Nasdaq extended their run of all-time closing highs to eight straight sessions, while the blue-chip Dow notched its second consecutive record closing high.
In Canada, the Toronto Stock Exchange‘s S&P/TSX composite index closed at a record for the third straight day while MSCI’s all-country world index closed higher for a six successive session.
A 4.9% decline in Tesla Inc shares weighed on the S&P 500. Tesla fell after Chief Executive Elon Musk’s Twitter poll on whether he should sell about 10% of his stock in the electric automaker.
“The majority voted for him to sell, which effectively signals that he is going to dump stock on the market,” said Russ Mould, investment director at AJ Bell.
The pan-European STOXX 600 index rose 0.06%.
World shares have rallied as relatively dovish talk from central bank officials last week and strong U.S. labor data on Friday bolstered investor optimism over solid earnings results on both sides of the Atlantic.
But a tight U.S. labor market along with the dislocation in global supply chains could result in a high reading for consumer prices on Wednesday. Strong inflation likely would rekindle talk of Federal Reserve raising interest rates earlier than expected.
Most U.S. Treasury yields rose after Congress passed a long-delayed $1 trillion infrastructure bill on Saturday, though a broader social safety net plan remains elusive.
Demand was soft for three-year notes at auction.
The benchmark 10-year yield rose 4 basis points at 1.4932%.
Oil prices rose and the United States said it was weighing options to address high prices. Brent crude rose 69 cents to settle up at $83.43 a barrel. U.S. crude rose 66 cents to settle at $81.93 a barrel.
Short-term inflation expectations increased in October, according to survey findings released by the New York Federal Reserve on Monday, and consumers’ expectations for how much money they will earn and spend over the next year rose to the highest level in eight years.
Median expectations rose in October to 5.7% for what inflation will be one year from now from 5.3% in September. It was the 12th straight monthly increase and a new high for the survey launched in June 2013. Medium-term expectations for what inflation will be in three years remained unchanged at 4.2% after three consecutive monthly increases.
The dollar dipped after hitting 15-month highs last week.
The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.172% to 94.055.
The euro slid 0.01% to $1.1585, while the yen traded remained unchanged at $113.2200.
Gold rose to a two-month high, bolstered a weaker dollar and persistent inflation concerns.
U.S. gold futures settled 0.6% higher at $1,828 an ounce.
Cryptocurrencies, which like gold pay no coupon and are seen as a possible hedge against inflation, also rose. Ether hit a record peak and bitcoin jumped to a three-week high.
Bitcoin last rose 4.6% to $66,240.26.
(Additional reporting by Herbert Lash in New York, Danilo Masoni in Milan, Sujata Rao in London, and Wayne Cole in Sydney; Editing by Toby Chopra, Will Dunham, Anil D’Silva and David Gregorio)
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