Shares bounce back while returns, oil prices fall

  • Gold, oil futures are falling while bitcoin is rising
  • Dollars gain some ground in volatile sessions

NEW YORK, May 10 (Reuters) – Wall Street shares picked up on Tuesday and US government bond yields fell while oil prices fell due to fears of inflation and declining economic growth around the world.

US government bonds rose, with the return on the benchmark index for the 10-year banknote falling from more than a three-year high to below 3% when the market reassessed the inflation outlook the day before the data from the US consumer price index (CPI) are published.

US crude oil futures fell below $ 100 a barrel to a two-week low as the outlook for demand was confused by coronavirus shutdowns in China and growing concerns about recession, while a strong dollar made crude oil more expensive for buyers using other currencies. read more

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Markets have been volatile across asset classes due to a combination of rising inflation and fears that monetary tightening aimed at slowing price increases will lead to a slowdown in global economic growth.

Last week, central banks in the US, UK and Australia raised interest rates, and investors called for more austerity while decision-makers fought against sky-high inflation.

After dipping into red for about two hours, S&P was last up solid on the day in contrast to Monday’s furious sales. Technology, the market’s largest growth sector, led to progress as investors reacted to falling bond yields.

“If we’ve seen the worst of the rate of change from long-term interest rates, it could create room for equities to do a little better,” said Sameer Samana, Senior Global Market Strategist at Wells Fargo Investment Institute in St. Louis.

The Dow Jones Industrial Average (.DJI) rose 14.43 points, or 0.04%, to 32,260.13, the S&P 500 (.SPX) rose 26.46 points, or 0.66%, to 4,017.7 and Nasdaq Composite (1.83) 5 points. 1.58% to 11,806.75.

The pan-European STOXX 600 Index (.STOXX) closed 0.68% higher while MSCI’s target for stocks across the globe (.MIWD00000PUS) was last up 0.31%.

Matthew Miskin, co-chief investment strategist at John Hancock Investment Management, was reassured by decision-makers including Cleveland Federal Reserve Bank President Loretta Mester. While Mester said that unemployment could increase and growth could slow down, she added that austerity measures should not lead to a “sustained downturn”. read more

“They have been so hawkish that every little movement that the market wants to sniff out,” Miskin said. “In terms of sentiment, there are many who are looking for capitulation. The points are not quite connected yet for that.”

The US dollar was choppy on Tuesday as it remained almost two decades high before a key reading on inflation that could provide insight into the Fed’s policy path. read more

The dollar index rose 0.203%, with the euro down 0.23% to $ 1.0531. The yen weakened 0.09% to $ 130.38 per dollar, while the pound last traded at $ 1.2322, down 0.07% on the day.

Oil prices fell in volatile trade as the market balanced imminent EU sanctions against Russian oil with demand concerns related to the coronavirus in China, a strong dollar and increasing recession risk.

U.S. crude oil recently fell 3.41% to $ 99.57 a barrel and Brent was at $ 102.30, down 3.44% on the day.

“There is probably some destruction of demand and sticker shock at these levels. The second part is what is happening in China. The longer it continues, the more it takes the pressure off of tight inventory levels,” said Wells Fargos Samana.

Earlier data showed that China’s export growth slowed to its weakest in almost two years, as the central bank promised to step up support for the declining economy. read more

Benchmark 10-year banknotes last rose 26/32 in price to a return of 2.9771%, from 3.079% late on Monday.

Spot gold fell 0.5% to $ 1,844.31 per ounce. Elsewhere, Bitcoin was up 5% after previously falling to its lowest level since July 2021. Tuesday’s gain recovered some losses from the 11.8% drop on Monday. read more

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Further reporting by Herbert Lash and Chuck Mikolajczak in New York, Elizabeth Howcroft in London; Edited by Bradley Perrett, Raissa Kasolowsky, Alexander Smith and Nick Macfie

Our standards: Thomson Reuters Trust Principles.

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