S&P 500, Nasdaq close at records as investors shrug off inflation concerns

Trader on the floor of the New York Stock Exchange

The S&P 500 recorded a record high for the second trading day in a row while a rally in tech stocks helped lift the Nasdaq to a record high. Investors are awaiting a key Fed decision later this week. Technology was the best performing sector in the S&P 500, with Apple gaining 2% and Facebook climbing over 1%. The yield on the US 10-yr Treasury rose to 1.5% after hitting a three month low last week.

Investors are eagerly awaiting for signals from the US Federal Reserve later this week about a timetable for scaling back ultra-accommodative policies. The decision is due Wednesday, with most economists anticipating the central bank will leave its policy mostly unchanged.

Here’s where US indexes stood at the 4 p.m. ET close on Monday:

Strategists can’t seem to agree on whether inflation will be transitory or not, despite the Fed insisting it will be short lived.

In an interview with CNBC on Monday, billionaire investor Paul Tudor Jones said he’s preparing to go “all in” on his inflation trade if the Fed remains unconcerned about rising prices. But others note that last week’s CPI data was elevated due to year-over-year comparisons.

“The largest increases were limited to used vehicles, energy and airfare,” said Nuveen’s Saira Malik. “Given the lack of evidence of rampant, widespread inflation, we remain confident in the Fed’s ability to stay on-message, even if discussions of tapering come a few quarters earlier than originally expected.”

Elsewhere in markets, Lumber prices fell as much as 6% on Monday to briefly trade below $1,000 per thousand board feet for the first time since late March.

Bitcoin rose above $40,000 after Elon Musk suggested Tesla would accept payment in cryptocurrency once mining can be done using cleaner energy.

West Texas Intermediate crude gained as much as 1.2%, to $71.78 per barrel. Brent crude, oil’s international benchmark, rose 1.3%, to $73.64 per barrel, at intraday highs.

Gold fell as much as 1.8%, to $1845.70 per ounce.

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S&P 500 flirts with record high as investors await Fed decision

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Traders on the floor react before the opening bell on the New York Stock Exchange on March 9, 2020 in New York.

  • The S&P 500 hovered near a record high Monday as investors bet on continued growth and await a key Fed decision out this week.
  • Stocks have been aided in recent days by a fall in bond yields. The US 10-yr was flat Monday morning.
  • Bitcoin rallied above $39,000 after Elon Musk tweeted about Tesla and payments.
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US stocks opened mixed Monday morning as the S&P 500 flirted with a record high. Investors are eagerly awaiting for signals from the US Federal Reserve later this week about a timetable for scaling back ultra-accommodative policies. The decision is due Wednesday, with most economists anticipating the central bank will leave its policy mostly unchanged.

“With stocks at or near record highs, economic data and the outcome of the Fed’s FOMC meeting on Wednesday will be a primary focus this week,” said Oppenheimer’s John Stolztfus.

“In our view the risk of inflation that would prove to be stickier than most folks expect lies less with Fed policy than it does with fiscal policy and stimulus programs that are being considered and could come from Capitol Hill and the Administration’s efforts,” the chief investment strategist added.

Here’s where US indexes stood at the 9:30 a.m. ET open on tk:

Stocks have been aided in recent days by a fall in bond yields, driven by ongoing support from Fed policymakers and by investors betting that the sharp rise in inflation in April and May will prove transitory.

Yields – which move inversely to prices – fell sharply over the course of last week, as bonds had their best week in a year. Yet the yield on the key 10-year US Treasury note was roughly flat on Monday at 1.472% as the rally paused.

Bitcoin came close to $40,000 after Elon Musk suggested in a tweet that Tesla will resume cryptocurrency payments. Musk said he’ll allow it when there’s proof of about 50% of clean mining energy usage.

Lordstown Motors slumped 15% in early morning trading after two top executives announced their immediate resignation just days after the electric vehicle company said it may run out of cash. The stock is down roughly 43% year-to-date.

West Texas Intermediate crude was up 0.82% to $71.51 per barrel. Brent crude, oil’s international benchmark, gained 0.77% to $73.25 per barrel.

Gold slid 1.52% to $1,851 per ounce.

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US stocks slip as investors await key inflation data

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A trader works on the floor of the New York Stock Exchange January 6, 2014.

  • US stocks drifted from records as investors braced for key inflation data out tomorrow.
  • Wall Street is worried overheating inflation may force the Federal Reserve to change its ultra-easy monetary policy.
  • Bitcoin recovered from its slump as El Salvador said it is adopting the crypto as legal tender.
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US stocks slipped into the close, stumbling away from record highs as investors await key inflation data out tomorrow. The yield on 10-year US Treasury declined five basis points to 1.49%

“Like waiting for the first Star Wars movie sequel, investors are holding their breath for what is expected to be a blockbuster May CPI report,” said Sam Stovall, CFRA chief investment strategist. “Yet in the face of such ‘inflation certainty,’ the 10-year yield has fallen below 1.5%, possibly due to the DC gridlock that likely stamped ‘DOA’ atop the $1.7 trillion Biden infrastructure proposal and questions the need for further fiscal assistance.”

Here’s where US indexes stood at the 4 p.m. ET close on Wednesday:

Bitcoin rose back above $36,000, boosted by El Salvador’s historic move in becoming the first country to establish bitcoin as legal tender. This gives the cryptocurrency the same status as the US dollar in the country.

Shares of Lordstown Motors slumped, deepening losses from the previous session after the electric-vehicle maker said it doesn’t have enough cash to start producing its Endurance truck and warned that it may have to shut down altogether.

In more encouraging SPAC news, retail investors will be able to buy into the IPOs of four blank-check companies run by Chamath Palihapitiya through SoFi’s trading platform, SEC filings revealed.

West Texas Intermediate crude fell 0.4% to $70 per barrel. Brent crude, oil’s international benchmark, dropped 0.29%, to $72.01 per barrel.

Gold dipped 0.1% to $1,891 per ounce.

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US stocks tick higher as investors remain optimistic on the economic reopening

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US stocks edged higher Wednesday with stocks pegged to the economic reopening taking the lead. The Russell 2000 small-cap index climbed 2%, outperforming other US indexes. Meanwhile the Dow was nearly flat, a less-than-exciting way to celebrate its 125th birthday. Tesla gained over 3%, lifting the consumer cyclical sector higher.

Central bank officials signaled that inflationary pressures are temporary, soothing investor concerns that a policy change would come sooner than expected.

Fed Vice Chair Richard Clarida said on Tuesday it would be possible to discuss scaling back the pace of asset purchases, and that pricing pressure will prove to be “largely transitory.”

San Francisco Fed Bank President Mary Daly told CNBC on Tuesday economic progress looks encouraging, but it isn’t yet time to change policy.

“What we’ve seen is some really bright spots, some very encouraging news,” she said. “It gives me hope, and I am bullish for the future. But it’s too early to say that the job is done.”

Here’s where US indexes stood at the 4 p.m. ET close on tk:

Goldman Sachs said that US stocks now face “headwinds”after a 12-month rally, with rising bond yields, higher inflation and slower jobs growth set to weigh on equity prices as markets move into 2022 and beyond.

Frenzied meme-stock trading continued today. GameStop has surged over 35% the past two days, while AMC is up 49% since the start of the week. New rallies in the two stocks caused short sellers to lose $618 million on Tuesday alone.BlackBerry jumped as much as 12%Wednesday.

In more GameStop news, the video game retailer is building an NFT platform. It’s part of an ambitious plan to transform itself into the Amazon of gaming.

Societe Generale said commodity prices are at risk of a major reversal that could whipsaw investors positioning for rising inflation.

West Texas Intermediate crude gained as much as 0.5%, to $66.43 per barrel.Brent crude, oil’s international benchmark, rose 0.7%, to $69.17 per barrel, at intraday highs.

Gold slipped as much as 0.3%, to $1890.7 per ounce.

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US stocks rise as Fed officials reassure investors inflation will be short lived

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Trading specialists work the floor of the New York Stock Exchange the morning after it set another record high, with the Dow Jones Industrial Average closing at 11,980, in New York, October 17, 2006.

US stocks edged higher on Wednesday after more central bank officials signaled that inflationary pressures are temporary, soothing investor concerns that a policy change would come sooner than expected.

Fed Vice Chair Richard Clarida said on Tuesday it would be possible to discuss scaling back the pace of asset purchases, and that pricing pressure will prove to be “largely transitory.”

San Francisco Fed Bank President Mary Daly told CNBC on Tuesday economic progress looks encouraging, but it isn’t yet time to change policy.

“What we’ve seen is some really bright spots, some very encouraging news,” she said. “It gives me hope, and I am bullish for the future. But it’s too early to say that the job is done.”

Here’s where US indexes stood at the 9:30 a.m. ET open on tk:

“The debate over inflation’s sustainability has been the primary directional driver of recent price action,” said Craig Johnson, Piper Sandler chief market technician. “Investors appear to be giving the Fed the benefit of the doubt with their transitory inflation forecast, but we suspect the window of confidence could close without supporting evidence in coming months. Based on this backdrop, we suspect economic uncertainty and volatility could remain high over the coming weeks as investors wait for more clarity on inflation and tapering.”

Cryptocurrency volatility continued, with bitcoin topping $40,000 Wednesday morning and ether moving above $2,800. JPMorgan said the recent headwinds in the cryptocurrency industry are similar to the 2017 collapse. Investors are diversifying out of bitcoin and ether into riskier altcoins again.

West Texas Intermediate crude fell as much as 1.2%, to $65.25 per barrel. Brent crude, oil’s international benchmark, slid 0.8%, to $68.05 per barrel, at intraday lows.

Gold erased nearly all of its 2021 losses and climbed as much as 0.7%, to $1913 per ounce.

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Dow slides 165 points in turbulent trading investors digest mounting inflation and Fed minutes

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  • US stocks finished lower in turbulent trading as investors digested the Federal Reserve’s April meeting minutes and continued to warily eye inflation.
  • Some Fed officials signaled they would be open “at some point” to begin discussing a plan for adjusting the pace of asset purchases.
  • Bitcoin fell as low as $30,000 per coin on the day before staging a rebound, while ethereum dropped to under $2,500 before paring losses.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks closed in the red Wednesday, though pared deep earlier losses, as investors digested minutes from the Federal Reserve’s April meeting and continued to warily eye inflation.

The minutes showed central bank officials were cautiously optimistic about the US recovery. Some officials signaled they would be open “at some point” to begin discussing a plan for adjusting the pace of asset purchases.

Here’s where US indexes stood at the 4 p.m. ET close on Wednesday:

Read more: Buy these 20 infrastructure stocks set to crush the market as Congress prepares a multi-trillion-dollar deal, Raymond James says

Jefferies’ Aneta Markowska said the signal about the plan to start adjusting purchases came as a surprise.

“It sounds like the Committee inadvertently started talking about, talking about, talking about tapering. Now, before we get ahead of ourselves, the suggestion was only voiced by ‘a number of participants’, and it was conditional on ‘continued rapid progress,'” she said, saying this will not change the timeline for tapering which will be signaled more formally in late August.

She added: “But, it is certainly a change from what we’ve heard so far, and something that Powell did not convey during the press conference. At the very least, it suggests that Kaplan is not the only Fed official getting antsy about the current policy stance,” she added.

Cryptocurrencies whipsawed throughout the day. Bitcoin has fallen to as low as $30,681 and climbed as high as $43,609 within the last 24 hours. The world’s largest cryptocurrency currently is hovering around $38,000. Other cryptocurrencies held on to double-digit percentage losses. Cryptocurrency-linked stocks like Coinbase and Riot Blockchain also fell.

Amid the crypto carnage, some investors remained bullish. Cathie Wood reiterated Ark Invest’s view that bitcoin will climb to $500,000 over the long term in a Bloomberg interview. Meanwhile Microstrategy’s Michael Saylor tweeted: “I’m not selling,” in a reference to bitcoin.

Lumber prices fell for an eighth straight day on Wednesday, deepening a roughly 30% pullback in the commodity.

West Texas Intermediate crude fell as much as 5.4%, to $61.95 per barrel. Brent crude, oil’s international benchmark, slid 5%, to $65.30 per barrel, at intraday lows.

Gold climbed as much as 1.1%, to $1,890.13 per ounce.

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Dow plummets 682 points on fears overheating inflation will stifle the economic recovery

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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2020.

US stocks tumbled into the close with the Dow dropping nearly 700 points as investors feared overheating inflation will stifle the nation’s economic recovery. Key inflation data came in significantly higher than expected Wednesday morning. The consumer price index increased 4.2% year over year in April and 0.8% from the prior month. Economists were expecting a 3.6% year over year gain and 0.2% gain from March figures.

Core inflation – which leaves out volatile energy and food prices – rose 0.9%. That’s the largest monthly increase for the core index since 1982.

The higher-than-expected figure stoked further concerns that the Federal Reserve is misreading the inflation story. The US central bank has signaled that inflationary pressures will only be transitory.

“The fact is that when we factor in all the monetary and fiscal stimulus that’s been delivered (or shortly will be), the Covid crisis seems likely to be a net inflationary event, at least in the near term,” said BlackRock’s Rick Rieder.

The chief investment officer of global fixed income and head of the BlackRock global allocation investment team added: “The risk of overheating in multiple places across the financial and real asset arenas is becoming more and more of a realistic challenge for future policy, as some have suggested, and without an evolution of what heretofore has been policy reacting to emergency economic conditions, the risk from this will only grow.”

Here’s where US indexes stood at the 4:00 p.m. ET close on Wednesday:

Read more: A 29-year-old crypto billionaire who’s perfected digital-currency arbitrage shares 2 tips for investors looking to get started in trading – and explains why ether is unlikely to surpass bitcoin

While there is likely more downside ahead for the stock market as it looks to find support near key technical levels, a bullish backdrop remains for equities, according to Bank of America. The 3% sell-off in the S&P 500 over the past week represents a rotational move into cyclical stocks and out of growth stocks rather than a top formation, the bank said in a Tuesday note.

Fundstrat’s Tom Lee is also bullish. In a Wednesday note he said the recent movements of two market fear signals are setting the stock market up for massive gains ahead.

Ether breached a valuation of $500 billion for the first time on Wednesday as the rally for the second-largest cryptocurrency continues. Ethereum’s digital token hit $4,357 at around 6 a.m. ET, according to data from CoinMarketCap – a 53% jump in just 12 days since the beginning of the month.

West Texas Intermediate crude rose as much as 2%, to $66.63 per barrel. Brent crude, oil’s international benchmark, jumped 1.9%, to $69.90 per barrel, at intraday highs.

Gold fell 0.9% to $1,819 per ounce.

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US stocks fall as rising inflation fears drive sharp tech selloff

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US stocks fell on Monday with the Nasdaq tumbling over 2% as investors feared a pick-up in inflation would weigh on the high-growth sector. Every one of the FAANG stocks – Facebook, Amazon, Apple, Netflix, and Google – closed down more than 2%.

Rising commodity prices are driving investors to question whether inflation will persist and derail the record-setting rally in stocks. Federal Reserve Chairman Powell and Treasury Secretary Yellen have both signaled that any inflationary pressures will just be temporary, but Wharton Professor Jeremy Siegel said on Friday that inflation could spike massively and force the Fed to change its policy stance earlier than anticipated.

Here’s where US indexes stood at the 4 p.m. ET close on Monday:

While some commodity prices, such as lumber and copper, have exploded lately, Goldman Sachs said in a note that agriculture and industrial metals could lead the next leg of the commodities rally for the next twelve months.

A frenzy in stock market retail trading failed to materialize in March despite $1,400 stimulus checks from the Biden administration. Retail trading activity fell to 18% of all US trades in March, according to a note from JPMorgan.

Ether recorded its biggest one-day gain in two years on Monday, as the world’s second-largest currency smashed past $4,000 for the first time. Meanwhile, Dogecoin plunged 10%, continuing its slide following Elon Musk’s appearance on Saturday Night Live over the weekend. Musk also announced his SpaceX company will launch the satellite “DOGE-1 Mission to the Moon” next year.

Gas futures hit their highest level since May 2018 on Monday as a cyberattack against the largest fuel pipeline in the US kept key operations offline for a third day and just weeks before demand for gas should spike for the summer season.

West Texas Intermediate crude fell as much as 1.4%, to $63.95 per barrel. Brent crude, oil’s international benchmark, slid 1.2%, to $68.28 per barrel, at intraday lows.

Gold climbed as much as 0.8%, to $1,846.30 per ounce.

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