On Monday, global stock indices generally experienced an uptick, with investors’ attention turning to a pivotal inflation report from the U.S. expected later in the week. Concurrently, the dollar saw a marginal softening against the yen, retreating from levels that had heightened vigilance for a potential intervention by Japan.
Previously, the dollar approached the 160-yen mark. Japan’s chief currency diplomat, Masato Kanda, indicated that the authorities are prepared to act decisively should there be undue volatility in the exchange rates, asserting that Japan’s recent inclusion on the U.S. Treasury’s watch list will not impede their capacity to intervene.
In currency markets, the dollar receded 0.16% to 159.54 yen. The dollar index, a measure of the dollar’s strength against a spectrum of currencies, dipped 0.39% to 105.47, while the euro appreciated 0.4% to $1.0734.
Investors are also anticipating the release of the U.S. Personal Consumption Expenditures (PCE) Price Index slated for Friday. It is forecasted that the core index’s year-on-year growth will decelerate in May.
“The primary concern for the market is the spectre of stagflation, that is, an economic slowdown coinciding with escalating inflation,” remarked Quincy Krosby, the Chief Global Strategist at LPL Financial based in Charlotte, North Carolina.
Market sentiment still leans towards the expectation of approximately two interest rate reductions this year, with the likelihood of a 25-basis-point cut in September being priced in at over 60%, as per LSEG’s FedWatch tool.
The Dow Jones Industrial Average climbed 363.50 points, or 0.93%, to 39,513.83, while the S&P 500 edged up 15.37 points, or 0.29%, to 5,480.51. Conversely, the Nasdaq Composite saw a decline of 41.96 points, or 0.23%, closing at 17,647.87.
Nvidia’s shares witnessed a downturn, continuing a trend of recent losses.
“Each instance of significant profit-taking has been met with ‘dip buyers’ stepping in, propelling the prices higher once again,” Krosby observed.
The MSCI global stock index rose 3.22 points, or 0.40%, to 804.47, and the STOXX 600 index in Europe advanced 0.77%. Japan’s Nikkei index concluded the day 0.5% higher.
Looking ahead, investors are poised to focus on the upcoming U.S. presidential debate on Thursday and the initial round of the French elections over the weekend.
President Joe Biden is set to enter the debate against Donald Trump, equipped with new immigration and border policies, which his supporters believe will enhance his appeal to undecided voters.
In France, the far-right National Rally party, along with its affiliates, is projected to lead the first round of the national elections with 35.5% of the vote, as per a recent poll.
In the bond market, the yield on the benchmark U.S. 10-year Treasury notes inched up by 0.8 basis points to 4.265%, from 4.257% at the close of the previous week.
In the commodities sector, U.S. crude oil prices increased by 0.81% to $81.38 per barrel, and Brent crude ascended to $85.8 per barrel, marking a 0.66% rise for the day.