US rates reach ten-year highs
European stocks and the Nasdaq soar
U.S. Treasury yields surged to their highest levels in a decade, European stocks rebounded from a six-week low, and the Nasdaq climbed over 1% on Monday as investors looked ahead to the Federal Reserve meeting scheduled for Friday in Jackson Hole, Wyoming. Wall Street experienced mixed trading, with the Dow Jones Industrial and the S&P 500 relinquishing early gains, while the Nasdaq Composite rose due to optimism surrounding earnings.
Benchmark oil futures, initially rallying over $1 per barrel, ended lower as expectations for Chinese demand waned. The Dow Jones Industrial Average (.DJI) declined by 36.97 points or 0.11%, closing at 34,463.69. Conversely, the S&P (.SPX) gained 30.06 points or 0.69%, reaching 4,399.77, and the Nasdaq (.IXIC) saw an increase of 206.81 points or 1.56%, closing at 13,497.59. Semiconductor stocks, particularly Nvidia (NVDA.O), experienced gains following an increase in target prices by HSBC.
Wednesday's earnings reports are anticipated to be a significant assessment of valuations. The pan-European STOXX 600 (.STOXX) finished higher after recovering from a six-week low, with the energy (.DXEP) and mining (.SXPP) sectors benefiting from higher prices of crude oil and metals. Germany's DAX (.GDAXI) rose by 0.2%, despite official data revealing a higher-than-expected fall in German producer prices in July. Dutch digital payments firm Adyen (ADYEN.AS) faced an 8.6% slump after two brokerages downgraded the stock due to the company falling short of half-year expectations.
Longer-dated U.S. Treasury yields, including the 30-year yield, reached their highest levels since April 2011. The 10-year Treasury yield hit 4.354%, the highest since November 2007, pre-dating the Great Financial Crisis triggered by the collapse of Lehman Brothers. The focal point for the week remains the Federal Reserve's Jackson Hole conference, where it is expected that Chairman Powell will address the surge in yields and recent robust economic data. The Atlanta Fed's GDP Now tracker projects a substantial 5.8% growth for this quarter. While a majority of polled analysts believe the Fed has concluded its hiking cycle, traders are placing a 40% probability on a final Fed rate hike by 2024.
Comments