Treasury yields fell and stocks rose as data showing a slowdown in inflation bolstered speculation the Federal Reserve is close to ending its rate hikes.
(Bloomberg) — Treasury yields fell and stocks rose as data showing a slowdown in inflation bolstered speculation the Federal Reserve is close to ending its rate hikes.
The S&P 500 finished at its highest since April 2022, while the Nasdaq 100 outperformed. Two-year yields, which are more sensitive to imminent policy moves, slid 13 basis points to 4.74%. The dollar slipped to a 15-month low. Brent crude climbed above $80 a barrel for the first time since May.
The consumer price index rose 3% in June from a year ago. The core measure — which economists view as the better indicator of underlying inflation — advanced 4.8%, the lowest since 2021 — still well above the Fed’s target.
“It’s too early to pop the champagne, but it’s not too early to start chilling the bottle,” said Ronald Temple, chief market strategist at Lazard. “Better-than-expected data increases the likelihood that a Fed rate increase on July 26 will be the last of this cycle.”
In corporate news, Meta Platforms Inc. and Nvidia Corp. led gains in megacaps. Domino’s Pizza Inc. jumped on a third-party ordering agreement with Uber Technologies Inc. Microsoft Corp. is set for a second shot at winning UK approval for its takeover of Activision Blizzard Inc., but regulators warn that any antitrust fixes would trigger a new probe.
Key events this week:
- China trade, Thursday
- Eurozone industrial production, Thursday
- US initial jobless claims, PPI, Thursday
- US University of Michigan consumer sentiment, Friday
- US banks kick off earnings, Friday
Some of the main move in markets:
Stocks
- The S&P 500 rose 0.7% as of 4 p.m. New York time
- The Nasdaq 100 rose 1.2%
- The Dow Jones Industrial Average rose 0.3%
- The MSCI World index rose 1.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.9%
- The euro rose 1.2% to $1.1136
- The British pound rose 0.5% to $1.2992
- The Japanese yen rose 1.4% to 138.46 per dollar
Cryptocurrencies
- Bitcoin fell 1% to $30,264.82
- Ether fell 0.3% to $1,868.45
Bonds
- The yield on 10-year Treasuries declined 11 basis points to 3.86%
- Germany’s 10-year yield declined seven basis points to 2.58%
- Britain’s 10-year yield declined 15 basis points to 4.51%
Commodities
- West Texas Intermediate crude rose 1.6% to $76.01 a barrel
- Gold futures rose 1.4% to $1,963.50 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Tassia Sipahutar, Robert Brand, Emily Graffeo, Isabelle Lee, Ksenia Galouchko and Allegra Catelli.
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