Wall Street traders pushed the stock market higher, while bond yields retreated after economic reports bolstered speculation the Federal Reserve will be able to pause its interest-rate hikes in September.
(Bloomberg) — Wall Street traders pushed the stock market higher, while bond yields retreated after economic reports bolstered speculation the Federal Reserve will be able to pause its interest-rate hikes in September.
The S&P 500 climbed 1%, heading toward its longest winning streak in a month. A rally in megacaps like Tesla Inc. and Nvidia Corp. sent the Nasdaq 100 up almost 2%. Treasury two-year yields, which are more sensitive to imminent policy moves, dropped 16 basis points to 4.89%. Bitcoin rallied 5% as a US court paved the way for the first exchange-traded fund tracking the cryptocurrency.
Swap contracts showed lower bets on a Fed hike in 2023 and an increased chance of a rate cut during the first half of 2024.
US job openings fell by more than expected to 8.83 million — a more than two-year low — offering fresh evidence that labor demand is cooling. A separate report showed consumer confidence dropped the most in two years as souring views on jobs, higher borrowing costs and lingering inflation curbed optimism.
“The Fed reiterated its commitment to be data-dependent, and with reports like this, the Fed can most likely keep rates unchanged in September,” said Jeffrey Roach, chief economist at LPL Financial. “Investors should expect a softening labor report this Friday, further cementing the thesis that the Fed is getting close to finishing its tightening cycle.”
Corporate Highlights:
- Coinbase Global Inc. led a rally in cryptocurrency-related stocks after Grayscale Investments got backing from a federal court to launch the first Bitcoin ETF in the US — a watershed moment in the industry’s quest to tap billions of dollars from everyday investors.
- The $2.8 billion SPDR S&P Regional Banking ETF remained higher even after US regulators unveiled a proposal to boost oversight of midsize lenders and require them to be better prepared for potential failures.
- A gauge of US-listed Chinese stocks rallied as Bloomberg News reported that the nation’s largest banks are preparing to cut interest rates on existing mortgages and deposits, the latest state-directed measures to shore up growth in the world’s second-largest economy.
- Oracle Corp. gained after UBS Group AG upgraded the software company to buy from neutral.
- Best Buy Co. climbed after saying a painful sales slump in consumer electronics and household appliances is starting to show signs of easing.
- Pharmaceutical giants spanning Bristol-Myers Squibb Co. to Johnson & Johnson and Eli Lilly & Co. are the first targets of President Joe Biden’s historic foray into bargaining with drugmakers to lower the cost of medicine.
Key events this week:
- Eurozone economic confidence, consumer confidence, Wednesday
- US GDP, wholesale inventories, pending home sales, Wednesday
- China manufacturing PMI, non-manufacturing PMI, Thursday
- Japan industrial production, retail sales, Thursday
- Eurozone CPI, unemployment, Thursday
- ECB publishes account of July monetary policy meeting, Thursday
- US personal spending and income, initial jobless claims, Thursday
- China Caixin manufacturing PMI, Friday
- Eurozone S&P Global Eurozone Manufacturing PMI, Friday
- South African central bank governor Lesetja Kganyago, Atlanta Fed President Raphael Bostic, BOE’s Huw Pill, IMF’s Gita Gopinath on panel at the South African Reserve Bank conference, Friday
- Boston Fed President Susan Collins speaks at virtual event, Friday
- US unemployment, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 1% as of 11:35 a.m. New York time
- The Nasdaq 100 rose 1.8%
- The Dow Jones Industrial Average rose 0.5%
- The Stoxx Europe 600 rose 1%
- The MSCI World index rose 1.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.3% to $1.0850
- The British pound rose 0.1% to $1.2619
- The Japanese yen rose 0.4% to 145.92 per dollar
Cryptocurrencies
- Bitcoin rose 5.6% to $27,431.46
- Ether rose 4.5% to $1,719.93
Bonds
- The yield on 10-year Treasuries declined seven basis points to 4.13%
- Germany’s 10-year yield declined six basis points to 2.50%
- Britain’s 10-year yield declined two basis points to 4.42%
Commodities
- West Texas Intermediate crude rose 0.4% to $80.39 a barrel
- Gold futures rose 0.9% to $1,964.50 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller and Robert Brand.
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