U.S. equities finished higher, extending a winning streak to two days following a very volatile week, as a recovery in global bond yields, as well as optimism of further stimulus measures out of China and Germany, boosted investor sentiment.
Treasury yields were higher, along with the U.S. dollar amid an empty economic calendar that won’t heat up until later in the week and culminate with Friday’s speech from Fed Chairman Jerome Powell in Jackson Hole, Wyoming.
Crude oil prices were solidly higher, but gold pared a recent rally.
The Dow Jones Industrial Average rose 250 points (1.0%) to 26,136
The S&P 500 Index increased 35 points (1.2%) to 2,924
The Nasdaq Composite advanced 107 points (1.4%) to 8,003
In moderate volume, 766 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq
WTI crude oil moved $1.33 higher to $56.14 per barrel and wholesale gasoline was unchanged at $1.66 per gallon
The Bloomberg gold spot price lost $18.33 to $1,495.19 per ounce
The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% higher at 98.37
Treasury yields recover somewhat ahead of Fed gathering in Jackson Hole
Treasuries were lower, as the yields on the 2-year and the 10-year notes were up 7 basis points (bps) to 1.54% and 1.61%, respectively, while the 30-year bond rate gained 8 bps to 2.08%. Bond yields have recovered somewhat from a sharp drop that has come amid global growth concerns, U.S.-China trade uncertainty, and heightened geopolitical uneasiness, while global central banks are highly expected to deliver further accommodation.
Last week, market volatility continued to ramp up as the recent plunge in bonds rates that saw the yields on the 2-year and 10-year U.S. Treasury notes briefly invert and the 30-year bond rate fall below 2.0% for the first time in history, accompanied deeper dives into negative rates globally—notably in Europe—and amplified global market skittishness.
Europe sees widespread gains, Asia also begins week higher
European equities finished broadly higher, with global bond yields recovering a bit, while the markets seemed to get a boost from reports that Germany is preparing a fiscal stimulus plan to combat slowing economic growth, as well as reforms from China aimed at lowering borrowing costs. U.K. Brexit concerns continued to fester, while a relatively light economic calendar showed headline July Eurozone consumer price inflation came in a bit cooler than expected.
The euro ticked higher versus the U.S. dollar and the British pound lost ground, while bond yields advanced.
Stocks in Asia finished broadly higher to kick off the week, following Friday’s rally in the U.S. markets to cap off a wild weekly ride, while sentiment appeared to be underpinned by signs of stability in the global bond markets and reforms announced in China to lower borrowing costs.
Chinese stocks led the way, with those traded in both the mainland and in Hong Kong rallying. The yen continued to trim a recent advance, helping Japanese equities to move higher, while the nation reported a smaller-than-expected fall in July exports. Australian securities gained ground and South Korean listings rose, while markets in India ticked slightly higher.