US stocks edged higher on Wednesday as investors cheered cooling inflation in the UK and looked ahead to tech earnings due at the close of New York trading.
(Bloomberg) — US stocks edged higher on Wednesday as investors cheered cooling inflation in the UK and looked ahead to tech earnings due at the close of New York trading.
The S&P 500 gained 0.2% while the tech-heavy Nasdaq 100 drifted with Netflix Inc., International Business Machines and Tesla Inc. expected to report after the bell. Apple Inc. rose as much as 2.3% after Bloomberg reported on its efforts to build AI tools. Meanwhile, a profit slump at Goldman Sachs Group Inc. stood in contrast to beats earlier in the week from peer investment firms.
US Treasuries pared gains on a UK inflation report earlier in the session. Price pressures in Britain dropped to the lowest in 15 months, adding to evidence central banks can go easier on raising interest rates. However, gains across the curve eased following a spike in commodities including wheat after a warning from Russia that any ships to Ukraine would be seen as carrying arms.
Evidence of easing price pressures in the US and UK are bolstering hopes among investors a campaign of monetary tightening is drawing to a close. However, shaky economic reports have made clear the Federal Reserve is far from claiming victory.
“The risk of recession has receded dramatically,” said Neil Dutta, head of economics at Renaissance Macro Research, on Bloomberg TV. “I think the markets are right to allocate a little bit more to the soft landing story, but I think you can make a good case that maybe we’re getting a little bit over our skis here and we should probably put some more potential on the resurgence of the inflationary-boom scenario.”
In other corporate news, Carvana Co. gained 28% after the used-car retailer reached a deal to restructure its debt and filed to sell as much as $1 billion in stock.
AT&T Inc. rose 7.8% after the telecommunications company reassured investors by saying less than 10% of its nationwide copper-wire telecom network had lead-clad cables.
And Kering SA rose 7.0% in New York after it was said to be speaking to defense advisers as activist investors including Bluebell Capital Partners circle the French luxury group.
In Asia, shares in Hong Kong and mainland China were among the worst performers, and the offshore yuan fell to the weakest level in more than a week.
Investors see no easy fix to China’s economic slump, with fresh signs of financial stress among the nation’s dollar-bond issuers.
Rio Tinto Group said second-quarter shipments of iron ore fell 1% from a year earlier, as China’s faltering economic recovery continued to weigh on demand.
Elsewhere, gold declined, the dollar strengthened and WTI crude wavered after earlier gains.
Key events this week:
- Eurozone CPI, Wednesday
- US housing starts, Wednesday
- China loan prime rates, Thursday
- US initial jobless claims, existing home sales, Conf. Board leading index, Thursday
- Japan CPI, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.2% as of 12:42 p.m. New York time
- The Nasdaq 100 was little changed
- The Dow Jones Industrial Average rose 0.3%
- The MSCI World index rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index rose 0.4%
- The euro fell 0.3% to $1.1192
- The British pound fell 1% to $1.2908
- The Japanese yen fell 0.6% to 139.60 per dollar
Cryptocurrencies
- Bitcoin rose 0.4% to $29,897.13
- Ether rose 0.4% to $1,902.47
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.76%
- Germany’s 10-year yield advanced five basis points to 2.44%
- Britain’s 10-year yield declined 12 basis points to 4.21%
Commodities
- West Texas Intermediate crude rose 0.2% to $75.90 a barrel
- Gold futures were little changed
This story was produced with the assistance of Bloomberg Automation.
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