The S&P 500 and the Nasdaq 100 both won, wiping out earlier losses by more than 1%, after Senate Minority Leader Mitch McConnell said he planned to offer an increase in the debt ceiling in the short term. term that would last until December.
The turmoil came as the benchmark S&P 500 posted four straight days of 1% moves amid a growing list of concerns, including debt ceiling, inflation and soaring prices of the ‘energy. European stocks also cut losses in half as natural gas prices – up 40% at one point – fell after Russian President Vladimir Putin said the country was ready to help.
“With the latest news that Republicans are ready to come to the table and negotiate an extension, stocks (and yields) have rallied,” Wells Fargo Securities strategist Anna Han said in an email. . “It’s certainly not all rosy, but it does provide short-term relief to one of the various macroeconomic risks we are seeing. “
The yield on the 10-year US Treasury bill was little changed as investors looked at the US economic outlook. ADP employment data beat analysts’ expectations ahead of Friday’s nonfarm wages in the United States, confirming forecasts that the Federal Reserve will cut stimulus next month. A solid US employment report could allay concerns about ongoing hiring problems. However, the market remains volatile amid fears that high inflation may persist longer than the central bank expects, especially in the face of an energy crisis this winter.
“Of course, the pace of private payroll figures is positive, but there is no shortage of catalysts that could move the market,” said Mike Loewengart, managing director of investment strategy at E * Trade Financial, adding that positive jobs data could prompt the Fed to tighten policy at a faster pace. “But the fact that hiring is on the rise should not be ignored. This is definitely a good thing in terms of recovery.
If the job gains in ADP data translate to Friday’s report, analysts expect the Fed to announce plans to curtail asset purchases in early November. Fed Chairman Jerome Powell has said he is looking for “decent” job growth.
“We’re in a pretty different job market in that for many industries there is a shortage of workers,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “I hope we are seeing more labor supply with children back to school, COVID under control and the end of extra unemployment benefits. “
Crude oil in New York fell, the dollar was stronger against its major peers, and Bitcoin jumped above US $ 54,000.
Some of the main movements in the markets:
- The S&P 500 rose 0.4% at 4 p.m. New York time
- The Nasdaq 100 rose 0.6%
- The Dow Jones Industrial Average rose 0.3%
- The MSCI World Index has changed little
- Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.3% to US $ 1.1558
- The British pound fell 0.3% to US $ 1.3588
- The Japanese yen was little changed at 111.39 per dollar
- The yield on 10-year treasury bills was little changed at 1.52 percent
- The German 10-year yield was little changed at -0.18%
- UK 10-year yield fell 1 basis point to 1.07%
- West Texas Intermediate crude fell 2.4% to US $ 77.06 a barrel
- Gold futures rose 0.3% to US $ 1,765.50 an ounce