The S&P 500 closed lower after hitting all-time highs for three consecutive trading sessions, dragged down by declines in the energy and industrials sectors. Apple Inc. and Microsoft Corp. lifted the high-tech Nasdaq 100, while the Dow Jones Industrial Average also fell to a record low, with Boeing Co. and Goldman Sachs Group Inc. among the biggest declines. 10-year Treasury yields fluctuated when the Federal Reserve began its two-day policy meeting.
“The actual growth numbers continue to exceed almost anything experts predict, so the market is trying to figure out what that means in the long run,” said Stephen Dover, chief market strategist and director of Franklin Templeton Investment. Institute. “The growth had so far outperformed the value that there had been a rotation, but a lot of that rotation has taken place, and now they are closer to each other and there is a tug between those areas. and sectors. ”
In Europe, traders have ignored decisions by Germany, France and Italy to suspend the AstraZeneca Plc vaccine ahead of a meeting of regional health ministers to discuss the future of the COVID-19 vaccine. The Stoxx 600 index rose 0.9%.
Markets saw modest gains in Japan and China, where investors expected a possible broader crackdown on the internet industry. Oil fell for a third day, while the dollar was mixed against its main competitors.
With the global economy increasingly on the path to exiting the pandemic, attention turns to the Fed’s communications on Wednesday, which will include new economic and interest rate projections. Reflation trades stand to gain if the central bank maintains a hands-off approach to the recent rise in yields. Bets on a faster economic recovery have already helped push a market inflation indicator to its highest level since 2008, and a further rise in yields could stimulate a turn from growth stocks to value stocks.
“As bond volume declines and rates are blocked by short-term European risk, the painful trade that started yesterday continues,” growth stocks outperforming, said Dennis DeBusschere, head of portfolio strategy at Evercore ISI. “Bond yields will eventually catch up with inflation expectations.”
Longer term, investors are weighing the potential for a package of infrastructure spending and tax increases in the United States.
Elsewhere, Bitcoin traded around $ 56,000, down from a weekend high above $ 61,000.
Here are some key events from this week:
Fed Chairman Jerome Powell is likely to reaffirm his consistent political stance at the Fed’s policy meeting on Wednesday.
Bank of England rate decision Thursday. The BOE is expected to leave monetary policy unchanged.
Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing on Friday.
Here are the main movements in the markets:
The S&P 500 Index fell 0.2 percent to 3,962.71 at 4:04 p.m. New York time, the first retreat in more than a week.
The Dow Jones Industrial Average fell 0.4 percent to 32,825.95, the first decline in more than a week.
The Nasdaq Composite Index gained 0.1 percent to 13,471.57, the highest in more than two weeks.
The Nasdaq 100 index rose 0.5% to 13,152.28, the highest in more than two weeks.
The Stoxx Europe 600 index rose 0.9 percent to 426.82, the highest in about 13 months on the biggest rise in more than a week.
The Bloomberg Dollar Spot Index was little changed at 1,139.61.
The euro fell 0.2 percent to US $ 1.1905, the weakest in a week.
The pound was little changed at US $ 1.3897, the weakest in a week.
The Japanese yen strengthened 0.1 percent to 109 to the dollar, the largest gain in a week.
The yield on two-year Treasuries fell less than a basis point to 0.15 percent.
The yield on 10-year Treasuries climbed one basis point to 1.61 percent.
Britain’s 10-year yield fell one basis point to 0.785 percent.
Germany’s 10-year yield fell less than a basis point to -0.34 percent, the lowest in two weeks.
West Texas Intermediate crude fell 1.1 percent to US $ 64.66 a barrel, the largest drop in a week.
Gold was little changed at US $ 1,731.90 an ounce, the highest in two weeks.