Stocks Rise As Inflation Fears Wane; Bitcoin Jumps: Markets Wrap

U.S. stocks rose as several Federal Reserve officials downplayed inflation risks this week, easing concern that rate hikes would start sooner than expected. Bitcoin climbed.

Retailers led gains the S&P 500, with the Dow Jones Industrial Average — which made its debut 125 years ago — also rising. The tech-heavy Nasdaq 100 outperformed. Banks climbed as the chief executive officers from the largest lenders were testifying before Congress. Ford Motor Co. surged on plans to boost spending on electric vehicles. CVS Health Corp. and Walgreens Boots Alliance Inc. slid on news that Amazon.com Inc. is reportedly considering launching physical pharmacies.

As officials repeat the line that inflation will be transitory, U.S. three-month 10-year implied swaption volatility — a closely watched gauge of how much prices may move over the period — has declined. Still, there are a series of factors that could prompt market jitters. The latest Fed minutes showed a number of participants signaling openness to discussing tapering of bond buying at “upcoming meetings” if the economy evolves as expected. This position was echoed by Vice Chair Richard Clarida this week.

“Investors appear to be giving the Fed the benefit of the doubt with their transitory inflation forecast, but we suspect the window of confidence could close without supporting evidence in coming months,” said Craig W. Johnson, technical market strategist st Piper Sandler & Co. “Based on this backdrop, we suspect economic uncertainty and volatility could remain high over the coming weeks as investors wait for more clarity on inflation and tapering.”

Some other corporate highlights:

• Amazon agreed to buy the Metro-Goldwyn-Mayer movie company for $8.45 billion.
• Retailers Dick’s Sporting Goods Inc. and Abercrombie & Fitch Co. climbed on better-than estimated results. Nordstrom Inc. tumbled after the department-store operator reported disappointing margins.

Here are some events this week:

• U.S. initial jobless claims, GDP, durable goods, pending home sales on Thursday.

These are some of the main moves in markets:

Stocks

• The S&P 500 rose 0.3% as of 11:09 a.m. New York time
• The Nasdaq 100 rose 0.4%
• The Dow Jones Industrial Average rose 0.2%
• The Stoxx Europe 600 was little changed
• The MSCI World index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.2221
• The British pound fell 0.2% to $1.4127
• The Japanese yen fell 0.2% to 109.01 per dollar

Bonds

• The yield on 10-year Treasuries was little changed at 1.56%
• Germany’s 10-year yield declined four basis points to -0.21%
• Britain’s 10-year yield declined three basis points to 0.75%

Commodities

• West Texas Intermediate crude was little changed
• Gold futures rose 0.3% to $1,906 an ounce

Source