stock markets

Wall Street hits records on economic optimism; dollar falls

Reuters

This is AI generated summarization, which may have errors. For context, always refer to the full article.

Wall Street hits records on economic optimism; dollar falls

TRADING FLOOR. Traders work on the floor of the New York Stock Exchange in New York City, July 21, 2021.

Brendan McDermid/Reuters

The benchmark S&P 500 and the Nasdaq close at all-time record highs on Wednesday, August 25

Wall Street stocks rose while the US dollar slipped on Wednesday, August 25, with investors more optimistic a day after the House of Representatives passed the $3.5-trillion budget framework and a top health official expressed confidence in fighting COVID-19.

On Tuesday, August 24, the Democratic-controlled House voted to advance the framework, key to President Joe Biden’s agenda. Investor confidence in the economic outlook also got a boost when Dr. Anthony Fauci, top US infectious disease expert, said COVID-19 could be under control by early next year.

The benchmark S&P 500 and the Nasdaq closed at all-time record highs, while the Dow made gains led by financials, industrials, communications, and the consumer discretionary sector. It was the S&P 500’s 51st record high close this year.

Investors remained focused on what US Federal Reserve Chair Jerome Powell might say on Friday, August 27, about tapering the central bank’s bond-buying program when he speaks at the Jackson Hole symposium.

The dollar index, which measures the US currency against a basket of six major currencies, fell 0.087% to 92.832.

“Part of the risk-on move that began on Monday with FDA (Food and Drug Administration) approval of vaccines has continued,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.

“Some investors feel we’re reaching the peak of the COVID wave, thus reopening and economic growth will continue.”

The MSCI world equity index, which tracks shares in 50 countries, rose 0.16%, while the pan-European STOXX 600 index rose 0.01%. Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rallied 2.41%.

US Treasury yields rose to the highest in almost two weeks ahead of Powell’s speech. Algorithmic traders also sold Treasuries after the 10-year yields broke above their 200-day moving average.

Benchmark 10-year yields gained six basis points to 1.347%. On Wall Street, the Dow Jones Industrial Average rose 0.11% to 35,405.5, the S&P 500 gained 0.22% to 4,496.19, and the Nasdaq Composite added 0.15% to 15,041.86.

“Bond yields are rising and the reopening trade is on full blast, banks and other cyclicals are doing well. Tech is taking a back seat,” said Thomas Hayes, managing member at Great Hill Capital.

Oil prices rose more than 1% for a third session of gains, after US data showed fuel demand climbed to its highest since the start of the pandemic.

Brent crude rose 1.7% to settle at $72.25 a barrel. US West Texas Intermediate crude rose 1.2% to settle at $68.36 a barrel.

Gold slid over 1%, retreating further below the $1,800 level as investors awaited the Jackson Hole symposium.

Spot gold slipped 0.7% to $1,790.83 per ounce. Bullion had rallied 1.4% on Monday, August 23, to the highest in nearly three weeks, driven by a broad retreat in the dollar. – Rappler.com

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.

Summarize this article with AI

How does this make you feel?

Loading
Download the Rappler App!