Wall Street reclaimed some lost ground on Monday and benchmark US Treasury yields hit 3-1/2-year highs, beginning a crucial week of corporate earnings, economic data and expected interest rate hikes from the US Federal Reserve. level reached.
All three major US stock indexes were last marginally green as the 10-year Treasury yield edged closer to 3% and touched its highest level since December 2018.
US stocks’ modest rebound comes in the wake of the S&P 500’s fourth straight weekly decline, which marked its worst January-April percentage drop since 1932, as market participants concluding for a 50-basis-point interest rate hike. Tighten your waist. Fed’s two-day monetary policy meeting on Wednesday
“There are many crosswinds right now,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “The first is the Fed, the second is the war (in Ukraine) and the third is inflation.”
“Most economies are headed for a hard landing – a recession – and that’s what the market is discounting now,” Cardillo said.
A report from the Institute for Supply Management shows that US factory activity is losing steam, with its Purchasing Managers’ Index (PMI) falling well below consensus.
This followed a PMI report from China, which showed factory activity contracting for a second straight month as widespread COVID-19 shutdowns disrupted production and supply chains.
The Dow Jones Industrial Average rose 188.63 points, or 0.57%, to 33,165.84, the S&P 500 rose 31.09 points, or 0.75%, to 4,163.02 and the Nasdaq Composite rose 153.37 points, or 1.24%, to 12,488.01.
Glum China factory data pulled European shares down sharply, although the STOXX 600 was partially recovered from a sudden 3% drop earlier in the session, which some brokers called a “flash crash” due to an incorrect trade. [.EU]
The pan-European STOXX 600 index lost 1.05% and MSCI’s worldwide gauge of shares rose 0.18%.
Emerging market stocks fell 0.40%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.46% lower, while Japan’s Nikkei lost 0.11%.
The US Treasury yield gained ground, with long-term debt hitting multi-year highs.
The price of benchmark 10-year notes fell 24/32 to 2.9768%, from 2.885% late on Friday.
The price of the 30-year bond fell 52/32 to 3.038%, up from 2.946% late Friday.
Crude oil prices fell on concerns about demand driven by bleak factory data from China, the world’s biggest oil importer. [O/R]
US crude was down 2.73% at $101.83 a barrel and Brent at $104.35, down 2.6% on the day.
The dollar fell below a 20-year high against a basket of currencies ahead of the Fed’s expected rate hike as investors focused on the possibility that the FOMC could take an even harder stance.
The dollar index rose 0.48% with the euro falling 0.05% to $1.0536.
The Japanese yen weakened 0.19% to 130.10 per dollar, while sterling was last trading at $1.2531, down 0.32% on the day.
Gold prices fell to near 2-1/2-month lows as investors feared a steep interest rate hike from the Fed aimed at quelling inflation.
Spot gold fell 1.8% to $1,863.24 an ounce.
This story has been published without modification in text from a wire agency feed.