U.S. stocks bounced and Treasury yields retreated on Tuesday in choppy trade as investors absorbed remarks from the Federal Reserve that interest rates are likely to rise this year, as expected.
In comments to U.S. lawmakers, Federal Reserve Chairman Jerome Powell said he expected the Fed would raise rates and end its asset purchases this year, but that the central bank had made no decision about the timing for tightening monetary policy.
“Inflation is running very far above target. The economy no longer needs or wants the very accommodative policies we have had in place,” Powell said in his testimony.
The Dow Jones Industrial Average closed up 0.51%, the S&P 500 added 0.92%, and the Nasdaq Composite climbed 1.41%.
The pan-European STOXX 600 index rose 0.84% and MSCI’s gauge of stocks across the globe gained 0.94%.
“Comments from Fed Chair Jerome Powell reassured investors that the Fed is prepared to tighten monetary policy to maintain price stability,” analysts at Australia’s ANZ Bank said in a note.
Inflation pressures prompted the Fed in December to flag plans to tighten policy faster than expected, possibly even raising rates in March, though that was before it became clear just how fast the Omicron coronavirus variant would spread.
Some investors were relieved that the Fed did not sound more hawkish than the market had anticipated, and this helped Treasury yields pull back a touch from two-year highs struck earlier.
Benchmark 10-year Treasury yields retreated to 1.741%, after hitting an almost two-year high above 1.8% overnight.
Two-year Treasury yields, which are highly sensitive to interest rates, dipped to 0.8966%, down from a high of 0.945% last seen in February 2020. [US/]
The recovery in risk appetites weighed on the dollar. The dollar index, which measures the currency against a basket of six major currencies, fell 0.34% to 95.614. A softer dollar lifted the euro up 0.3% to $1.13670. [USD/]
The weaker dollar benefited bullion, and spot gold added 1.2% to $1,822.75 an ounce. U.S. gold futures gained 1.34% to $1,822.50 an ounce. [GOL/]
U.S. December consumer inflation data will be released on Wednesday with headline CPI expected to hit a red-hot 7% year- on-year, boosting the case for rates to rise sooner rather than later.
“We continue to believe liftoff in March is increasingly likely. How these debates are settled will likely have implications for post-liftoff rate hikes,” Nomura economists said in a report, referring to U.S. monetary policy.
“In particular, we believe comments regarding earlier runoff and less aggressive rate hikes support our view that the Fed will slow the pace of rate hikes to two per year in 2023.”
Oil rose to nearly $82 a barrel, supported by tight supply and hopes that rising coronavirus cases and the spread of the Omicron variant would not derail a global demand recovery.
U.S. crude recently rose 3.82% to $81.22 per barrel and Brent was at $83.72, up 3.52% on the day.
Stronger risk appetites supported bitcoin, which rose 2.1% to $42,722.21, after dropping below $40,000 the previous day for the first time since September.
(Reporting by Karin Strohecker, Sujata Rao and Tommy Wilkes in London and Anshuman Daga in Singapore; Editing by David Goodman, Gareth Jones, Mark Heinrich and Cynthia Osterman)
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
