The benchmark stock gauge closed 0.1 percent higher after falling as low as 1.8 percent amid a rout in tech stocks as top-flight stocks became overvalued. The Nasdaq 100 ended slightly lower, mostly erasing a loss that reached 3.5% after Powell signaled that the Federal Reserve was not close to withdrawing support for the economy. Airlines, accommodation companies and cyclical stocks that are expected to benefit from the end of pandemic lockdowns have outperformed.
So-called growth stocks are experiencing their worst month relative to their value counterparts in more than two decades, as vaccination campaigns accelerate and bond yields are near a one-year high. Bets on faster growth have pushed the spread between 5 and 30 year yields to the highest level in more than six years.
As Powell reassured investors about the stimulus measures, he expressed expectations for a return to more normal and improved activity later this year and said the higher bond yields reflected economic optimism, not fears. inflation. This has helped fuel the return of the bearish buying mentality that has limited stock draws in recent months, with investors betting on a global economic recovery boosted by vaccines and US spending.
“There was something for everyone today,” Leo Grohowski, chief investment officer of BNY Mellon Wealth Management, said in an interview with Bloomberg TV. “Powell has recognized the medium-term improvement in the economy, but I think he has put an end to some of the inflation fears that are spreading.”
Elsewhere, stocks in Asia were mostly higher as European stocks fell. Bitcoin fell below US $ 50,000 after an episode of volatility that highlighted lingering doubts about the sustainability of the token rally.
Some key events to watch this week:
– The EIA crude oil inventory report is released on Wednesday.
– Finance ministers and central bankers of the Group of 20 will meet practically on Friday. US Treasury Secretary Janet Yellen will be among the attendees.
Here are some of the main movements in the markets:
– The S&P 500 Index rose 0.1 percent at 4 p.m. New York time.
– The Stoxx Europe 600 index fell 0.4 percent.
– The MSCI Asia Pacific Index rose 0.1%.
– The MSCI Emerging Market index has changed little.
– The Bloomberg Dollar Spot Index fell 0.1 percent.
– The euro fell 0.1 percent to US $ 1.215.
– The British pound rose 0.4 percent to US $ 1,4114.
– The Japanese yen fell 0.2 percent to 105.27 per dollar.
– The yield on 10-year Treasury bills was little changed at 1.36 percent.
– Germany’s 10-year yield jumped two basis points to -0.32 percent.
– Britain’s 10-year yield rose four basis points to 0.72 percent.
– West Texas Intermediate crude rose 0.5 percent to US $ 62.03 a barrel.
– Gold fell 0.2 percent to US $ 1,805.81 an ounce.
– With the help of John Ainger, Cecile Gutscher, Joanna Ossinger, Andreea Papuc and Sarah Ponczek.