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Thursday, April 18, 2024
HomeFinance NewsDow, Nasdaq Begin Higher as Fed's Favored Inflation Gauge Cools

Dow, Nasdaq Begin Higher as Fed’s Favored Inflation Gauge Cools

Stocks have been facing pressure due to a bond selloff, resulting in the 10-year Treasury yield reaching its highest level since 2007. As a result, the S&P 500 has fallen by 2.7% this quarter and the Dow has lost 1.7%. However, there was a minor relief rally observed in the market recently. John Roe, head of multiasset at Legal & General Investment Management, referred to this as a “mini-relief rally.”

The dollar has been performing well this quarter and is on track for its best performance in a year. The WSJ Dollar Index has risen by 2.4% since the end of June, influenced by the increasing yields. In terms of economic indicators, the PCE price index, which is the Federal Reserve’s preferred measure of consumer inflation, showed a 0.4% rise in August. Excluding food and energy prices, the index increased by 0.1%. Additionally, both personal income and spending rose by 0.4%, primarily driven by higher gasoline prices.

Despite the overall market pressures, there were moderate gains in stocks observed. The S&P 500 increased by 0.7%, while the Nasdaq Composite, which is more focused on technology stocks, rose by 1%. Notably, Nike’s shares experienced a significant jump of 8.3% after the sportswear company’s quarterly profit exceeded Wall Street’s expectations. Treasury notes also saw some recovery, as the benchmark 10-year Treasury yield continued to decrease for a second day, along with a retreat in the U.S. dollar. Moreover, European stocks rallied, with the Stoxx Europe 600 showing a 1.2% increase. European economic data revealed that eurozone inflation cooled more than anticipated in September.

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