Stocks and bond selloff in US market get temporary break as traders analyze US data and speculate on Federal Reserve’s interest rate decisions
In a much-needed respite for investors, the stocks and bond selloff in the US market took a temporary break as traders analyzed US data and speculated on the Federal Reserve’s interest rate decisions. The Nasdaq 100 experienced a notable rise of 1.4%, with tech giants like Tesla, Microsoft, Amazon, and Apple leading the upward trend.
The S&P 500 also provided a glimmer of hope as it closed at around 4,264, above a key level that indicates potential relief from further market decline according to technical analysts. This positive movement helped restore some confidence among investors.
However, the market was not without its concerns. The ten-year Treasury yields initially touched a high of 4.88% during Asian trading hours before decreasing. This decrease might indicate investor caution and the need for further assessment of the market conditions.
Adding to the mixed signals, US companies reported the fewest number of job additions since the beginning of 2021 in September, according to a survey from the ADP Research Institute and Stanford Digital Economy Lab. The services sector also showed a modest decline and hit the lowest level this year. Market experts speculated that if the labor market continues to cool, stock investors may worry less about higher interest rates indefinitely.
The recent selloff in the market was triggered by better-than-expected US job data and hawkish comments from Federal Reserve officials. These factors led to concerns about further interest rate hikes, which had an adverse impact on the market.
Bond market veteran Bill Gross offered his perspective on the situation, believing that a US 10-year yield at 5% would provide “decent” but not “great” value due to inflation remaining high. This insight emphasizes the importance of inflationary pressures on future market movements.
Looking ahead, investors will closely monitor Friday’s payroll numbers and initial jobless claims data for signs of a cooling economy and the Federal Reserve’s messaging on interest rates. Additionally, key events to watch this week include China’s week-long holiday, France’s industrial production data, US trade and initial jobless claims numbers, and Germany’s factory orders.
In terms of major market movements, the S&P 500 rose 0.8%, the Nasdaq 100 rose 1.4%, the Dow Jones Industrial Average rose 0.4%, and the MSCI World index rose 0.3%. As for the currency market, the Bloomberg Dollar Spot Index fell 0.2%, the euro rose 0.5% to $1.0515, the British pound rose 0.6% to $1.2150, and the Japanese yen remained relatively stable at 149.04 per dollar.
In the cryptocurrency market, Bitcoin saw a modest rise of 0.8% to $27,617.31, while Ether fell 0.9% to $1,642.44. Bond market movements saw the 10-year Treasury yields decrease by seven basis points to 4.72%, Germany’s 10-year yield declined by five basis points to 2.92%, and Britain’s 10-year yield declined by two basis points to 4.58%. In the commodity market, West Texas Intermediate crude experienced a substantial drop of 5% to $84.73 a barrel, while gold futures fell 0.2% to $1,838.50 an ounce.