Stocks Stay Higher With Tech Still Driving Gains: Markets Wrap

(Bloomberg) — US stocks reclaimed some of their earlier gains as traders weigh economic data and company news.

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The S&P 500 and the Nasdaq 100 rose, but are still off the highs of the day. The dollar dropped. The 10-year US Treasury yield advanced to around 3.79%.

Markets were ebullient earlier after data highlighted a resilient US economy and China’s top leaders pledged to support fiscal spending. US stock indexes were also propelled higher by Micron Technology Inc., which gave a strong forecast aided by AI demand. On the other hand, news of the Justice Department’s probe of Super Micro Computer Inc. — also a beneficiary of the AI boom — pushed its shares lower.

Now, traders are awaiting data that could give them bigger clues about the US economy’s health and the Federal Reserve’s path ahead. The US central bank’s preferred price metric and a snapshot of consumer demand releasing on Friday will give them just that.

“We think there is the potential that economic data will be more resilient, especially on jobs, than the market is expecting,” said Peter Tchir, head of macro strategy at Academy Securities.

Earlier, revised data showed the US economy emerged from the pandemic in better shape than initially expected. A decline in US jobless claims underscored the resilience of the labor market. But investors who were waiting for commentary from Fed Chair Jerome Powell on Thursday didn’t get any details on the economic outlook or path for monetary policy.

China Doubts

The bid to revive growth by China’s top leaders on Thursday added to a slew of measures from Beijing this week that have supercharged local assets. The CSI 300 Index is headed for its biggest weekly gain in almost a decade.

But questions remain over the long-term impact of the measures.

“I wouldn’t be surprised if tomorrow we are going to see a bit of a pullback,” Helen Jewell, chief investment officer at BlackRock Fundamental Equities EMEA, told Bloomberg TV. “This is what is happening in the markets right now — you end up risk-on one day, risk-off the next day. The Chinese economy is still very fragile.”

Swiss Cut

Elsewhere, the Swiss National Bank cut borrowing costs by a quarter point at a third straight meeting and warned of more to come if needed in its attempt to contain the strength of the franc.

In commodities, oil slid for the second day as Saudi Arabia was reportedly committed to increasing output in December, while Libya named its new central bank governor, opening the way to reviving some crude production.

Key events this week:

ECB President Christine Lagarde speaks, Thursday
China industrial profits, Friday
Eurozone consumer confidence, Friday
US PCE, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

The S&P 500 rose 0.4% as of 2:29 p.m. New York time
The Nasdaq 100 rose 0.7%
The Dow Jones Industrial Average rose 0.7%
The MSCI World Index rose 0.7%

Currencies

The Bloomberg Dollar Spot Index fell 0.4%
The euro rose 0.4% to $1.1178
The British pound rose 0.7% to $1.3417
The Japanese yen was little changed at 144.72 per dollar

Cryptocurrencies

Bitcoin rose 2.6% to $65,126.2
Ether rose 2.1% to $2,635.68

Bonds

The yield on 10-year Treasuries was little changed at 3.79%
Germany’s 10-year yield was little changed at 2.18%
Britain’s 10-year yield advanced two basis points to 4.01%

Commodities

West Texas Intermediate crude fell 3.1% to $67.54 a barrel
Spot gold rose 0.7% to $2,674.78 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Margaryta Kirakosian, Winnie Hsu, Divya Patil, Richard Henderson, Ben Priechenfried, James Hirai, Sujata Rao, Alex Nicholson and Denitsa Tsekova.