Wall Street Close: Bulls cheer Treasury yields retreat
- Nasdaq leads the run-up portraying upbeat start to the week.
- US 10-year Treasury yields drop back towards 1.60%, DXY dropped.
- US Chicago Fed activity data, Fedspeak placate inflation concerns.
US equities marked a welcome start to the week by the end of Monday’s North American session as downbeat US data and Fed comments weighed on Treasury yields, not to forget reflation concerns. Also on the positive side was a corrective pullback in cryptocurrencies and a downbeat US dollar index (DXY).
A weaker-than-previous US Chicago Fed National Activity Index of 0.24 helped Fed Governor Lael Brainard to reject reflation fears. The Fed policymaker also signaled the US central bank’s ability to tame the inflation, “if it moves persistently above target.” Following Fed’s Brainard’s comments, St. Louis Fed President James Bullard also turned down fears from the recent jump in prices.
It’s worth mentioning that a bumpy road for US President Joe Biden’s infrastructure spending plan, despite recently cutting the total outlay, also adds to the receding fears of inflation.
Given the downbeat data and convincing Fedspeak, US 10-year Treasury yields dropped 2.9 basis points to 1.603% while the DXY also reversed Friday’s recovery moves.
That said, technology stocks propel Nasdaq to be the winner of the day, up 1.41% or 190.18 points around 13,661.17 while S&P 500 came in second with 41.19 points of upside, or 0.99% on a day, by closing near 4,197. Further, Dow Jones Industrial Average (DJI) also followed the suit with a 0.54% run-up, or 186.14 points, to 34,393.98.
Among the tech-shares, Microsoft’s 2.29% run-up and Apple’s 1.33% jump were notable while shares of Cabot and Cimarex slumped near 7.0% following the merger announcement.
Although the calmer day and positive catalysts helped US equities on Monday, traders are concerned about the Federal Reserve's preferred gauge of inflation, up for publishing on Friday, which in turn keeps the markets in a cautious mood ahead of the release.