US Stocks Climb for Third Day; Treasuries Rally: Markets Wrap
(Bloomberg) — US stocks ended Tuesday’s session higher, with traders reloading wagers on an interest-rate cut next month while the latest AI advances drove Big Tech valuations.
The S&P 500 rose 0.9% after swinging between modest gains and losses earlier. The Nasdaq 100, after declining as much as 1.3%, wrapped up the day 0.6% higher. Economic data out of the US on Tuesday further cemented bets that the Federal Reserve will lower rates in December. That optimism had pushed stocks higher even on Monday.
The US 10-year Treasury yield fell, lingering around 4% after White House National Economic Council Director Kevin Hassett emerged as the front-runner to serve as the next Fed chair. The dollar remained lower. Bitcoin dropped below $88,000.
Among individual stock movers, Alphabet Inc. came off session highs that had driven the search giant closer to a $4 trillion valuation, after The Information reported that Meta Platforms Inc. is in talks to use Google’s AI chips. Shares of Nvidia Corp., Advanced Micro Devices Inc. and Oracle Corp. remained lower.
“Nvidia is the biggest position in my portfolio and I am not worried at all by a 3% dip,” said Fares Hendi, global fund manager at Prevoir Asset Management in Paris. “It’s healthy that in a functioning market economy Google goes into this market, it just shows its vast potential.”
Tech stocks like Apple Inc., Meta Platforms Inc. and Amazon.com Inc. rose. Gains in the health-care sector also buoyed the S&P 500.
Delayed data that released earlier showed that US retail sales rose modestly in September while US wholesale inflation picked up, reflecting higher energy and food costs. US consumer confidence in November slid by the most in seven months because of anxiety about jobs and the economy. Private payrolls data for the four-week period ending Nov. 8 pointed to a moderating labor market.
The latest US economic reports are important to traders given the lack of fresh data before the Fed’s December meeting. Money markets are now pricing in about an 80% chance of a Fed rate cut in December. After fluctuating in recent weeks, the odds for further easing has steadily climbed following recent dovish remarks from some policymakers.
What Bloomberg Strategists Say…
“The combination of weak private payrolls and subdued retail sales figures was enough to push traders to lean into a December rate cut once more. They’re now showing the strongest conviction in a reduction since policymakers last gathered in October. The revival in rate-cut bets certainly comes at an opportune time for risk assets as they attempt to recover from last week’s turmoil, and bodes well for a year-end rally barring any major economic shocks.”
— Kristine Aquino, Managing Editor, Markets Live. For the full analysis, click here.
In commodity markets, oil fell as signs of progress in peace talks between Ukraine and Russia buoyed expectations that Moscow’s supply will stay online.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.9% as of 4:04 p.m. New York time The Nasdaq 100 rose 0.6% The Dow Jones Industrial Average rose 1.4% The MSCI World Index rose 0.9% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.4% to $1.1566 The British pound rose 0.5% to $1.3165 The Japanese yen rose 0.5% to 156.09 per dollar Cryptocurrencies
Bitcoin fell 1.7% to $87,254.31 Ether fell 1.1% to $2,925.69 Bonds
The yield on 10-year Treasuries declined two basis points to 4.00% Germany’s 10-year yield declined two basis points to 2.67% Britain’s 10-year yield declined four basis points to 4.49% Commodities
West Texas Intermediate crude fell 1.5% to $57.94 a barrel Spot gold fell 0.2% to $4,128.59 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from James Hirai, Julien Ponthus, Lynn Thomasson and Andre Janse van Vuuren.
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