Stocks Fluctuate While Dollar Advances; Oil Gains: Markets Wrap

U.S. stocks fluctuated on Wednesday as risks from a highly infectious coronavirus strain trumped growing confidence in the global economic recovery.

The S&P 500 Index swung between gains and losses after ADP data showed U.S. companies added more jobs in than expected, while pending home sales unexpectedly rose Cyclical stocks bore the brunt of losses in the Stoxx Europe 600 gauge, with airlines struggling as fears of the more contagious Delta variant continue to spur tourism curbs. Japan and Hong Kong led modest losses in Asia. Oil rose, while Bitcoin slipped.

Wednesday’s cautious turn comes amid better-than-expected ADP numbers and surprisingly positive data from the U.S. and Europe showing surging confidence in the economic recovery. That suggests markets remain finely balanced between hopes for an imminent return to normal and fears that runaway inflation or Covid variants could derail the rebound.

“The environment in Q3 should still be supportive for risky assets, though fear of bouts of persistent inflation could alter this scenario,” Sebastien Galy, senior macro strategist at Nordea Investment Funds SA, wrote in a note. “We expect to see bouts of volatility from this.”

Here are some events to watch in the markets this week:

• China’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party Thursday
• OPEC+ ministerial meeting Thursday
• ECB President Christine Lagarde speaks Friday
• The U.S. jobs report is due Friday

These are some of the main moves in markets:

Stocks

• The S&P 500 rose 0.1% as of 10:40 a.m. New York time
• The Nasdaq 100 was little changed
• The Dow Jones Industrial Average rose 0.4%
• The Stoxx Europe 600 fell 0.4%
• The MSCI World index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.1870
• The British pound was little changed at $1.3835
• The Japanese yen fell 0.3% to 110.83 per dollar

Bonds

• The yield on 10-year Treasuries declined three basis points to 1.44%
• Germany’s 10-year yield declined four basis points to -0.21%
• Britain’s 10-year yield declined three basis points to 0.71%

Commodities

• West Texas Intermediate crude rose 1% to $73.72 a barrel
• Gold futures were little changed

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