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The Breakfast Briefing: Stocks Extend Gains After The Fed As Bond Yields Dip
FYI: .European, Asian stocks jump; U.S. futures trade higher
• U.S. 10-year Treasury yield falls below 2%
• Gold and oil prices surge
Global stocks and commodities rallied Thursday while Treasury yields dipped after the U.S. Federal Reserve suggested it would cut interest rates if the economic outlook doesn’t improve in the coming months.
Fed Chairman Jerome Powell said Wednesday the bank will hold interest rates steady for now, but he dropped strong hints that further easing would be necessary if global trade tensions continue to dampen economic growth. Many economists expect the Fed to propose a 25-basis point cut at its July meeting.
U.S. 10-year Treasury yields fell below 2% for the first time since 2016. The rate was last at 1.997% on Thursday, down from 2.023% on Wednesday. Bond yields move in the opposite directions to prices. Mr. Powell’s comments also drove U.S. indexes near record highs on Wednesday.
The Stoxx Europe 600 on Thursday was up 0.7% in early trade. In Asia, China’s Shanghai Stock Exchange led gains as it jumped 2.4% in afternoon trade.
In the U.S., futures for the S&P 500 and the Dow Jones Industrial Average both climbed 0.6%. Futures don’t necessarily predict market moves after the opening bell.
The U.S. dollar weakened against other currencies, sending prices for dollar-denominated commodities sharply higher. Global oil benchmark Brent crude surged more than 3% to $63.85 a barrel, while gold rose 2.7% as the prospect of lower interest rates spurred investors to seek returns from alternative assets. Regards, Ted
