Stocks gain as traders await new catalysts
U.S. equities rose on Wednesday as the tussle between economic optimism and inflation concern continued to play out in markets.
The S&P 500 and Nasdaq 100 faded from early gains as traders awaited fresh catalysts in economic data, including the U.S. jobs report due later this week. AMC Entertainment Holdings Inc., a favorite among retail traders, rallied. Tesla Inc. fell following a reported loss in electric-vehicle market share. And energy stocks were among the best performing after WTI crude futures gained.
As the U.S. economy continues to claw its way back from the pandemic, traders are looking for fresh signals on whether that growth might translate into inflation and ultimately prompt the Federal Reserve to withdraw support.
Treasuries rose and the U.S. dollar erased gains after a trickle of Fed updates. The central bank's beige book reported the U.S. economy expanded at a moderate pace in April and May. Philadelphia Fed President Patrick Harker said it may be time to "think about thinking about" tapering, and Richmond Fed President Thomas Barkin said he was watching for signs of wage pressures.
Coming up, Friday's U.S. payrolls data will provide the next hint as to whether the central bank is likely to scale back its monthly asset purchases.
"It seems like they're starting to lay the ground work for tapering," Aaron Clark, portfolio manager at GW&K Investment Management, said of the Fed's recent signaling. "So I think investors are just in a holding pattern right now."
The last jobs report weighed on Treasuries and dollar, said Emily Roland, co-chief investment strategist at John Hancock Investment Management. "We'll have to see if that narrative reverses."
These are some of the main moves in markets:
Stocks
- The S&P 500 rose 0.1%, more than any closing gain since May 26 as of 4:01 p.m. EDT
- The Nasdaq 100 rose 0.2%
- The Dow Jones industrial average rose 0.1%, climbing for the fifth straight day, the longest winning streak since May 7
- The MSCI World index rose 0.1% to a record high
Currencies
- The Bloomberg Dollar Spot Index fell 0%
- The euro was little changed at $1.2208
- The British pound rose 0.1% to $1.4169
- The Japanese yen was little changed at 109.56 per dollar
Bonds
- The yield on 10-year Treasurys declined two basis points, more than any closing loss since May 25
- Germany's 10-year yield declined two basis points to -0.20%
- Britain's 10-year yield declined three basis points to 0.80%
Commodities
- West Texas Intermediate crude rose 1.5% to $69 a barrel
- Gold futures rose 0.3% to $1,911 an ounce
