Breaking News
Investing Pro 0
Black Friday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Stocks jump as growth shares lead; 2-year U.S. yields hit 14-year highs

Economy Sep 09, 2022 21:56
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board displaying graphs (top) of Nikkei index outside a brokerage in Tokyo, Japan, March 10, 2022. REUTERS/Kim Kyung-Hoon/File Photo
 
UK100
+0.27%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DE30
+0.01%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
Gold
+0.54%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Caroline Valetkevitch

NEW YORK (Reuters) - Global stocks rallied on Friday, led by technology and growth shares, and interest-rate sensitive two-year U.S. Treasury yields hit more than 14-year highs as investors digested the view that more interest rate hikes are needed.

The dollar fell to a more than one-week low and the euro rose back above parity to a three-week high against the U.S. currency, a day after the European Central Bank raised rates by a record 75 basis points on Thursday signaleded further hikes to fight inflation.

On Wall Street, all three major indexes ended with gains of at least 1%, scoring their first weekly increase in four weeks.

"After three weeks of a temper tantrum, the market has finally come to terms with the expected 75-basis-point increase from the (Federal Reserve) this month," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

"People logically know we've got to change inflation, and that's being done... and rates are still incredibly low" historically, Dollarhide added.

U.S. rate futures are pricing in an 87% chance of the Fed hiking by 75 bps hike this month.

Fed Governor Christopher Waller said on Friday that the U.S. central bank should be aggressive with rate hikes while the economy "can take a punch." The comments came a day after Fed Chair Jerome Powell reconfirmed that the central bank's priority is to tackle soaring price pressures.

Investors await key U.S. inflation data for August due on Tuesday.

On Friday, the Dow Jones Industrial Average rose 377.19 points, or 1.19%, to 32,151.71 the S&P 500 gained 61.18 points, or 1.53%, to 4,067.36 and the Nasdaq Composite added 250.18 points, or 2.11%, to 12,112.31.

The pan-European STOXX 600 index rose 1.52% and MSCI's gauge of stocks across the globe gained 1.73%.

In Treasuries, the yield curve inverted further. The inversion is seen by some as a sign that a recession is likely in the next one to two years.

Two-year yields reached 3.575%, the highest since November 2007. Benchmark 10-year note yields were last 3.321%. They have risen from a four-month low of 2.516% on Aug. 2 but are holding below the 11-year high of 3.498% reached on June 14.

Earlier, Germany's two-year bond yield hit its highest since 2011 for a second day.

In currencies, the dollar index dropped as low as 108.35 and was last down 0.5% at 108.96, pulling back after recent sharp gains. The dollar index also posted its first weekly decline in four weeks.

"Markets are getting a little nervous about levels, really historic levels, so the market decided not to push the dollar's strength at this juncture and lightened up positions," said Greg Anderson, global head of FX strategy at BMO Capital Markets in New York.

The greenback this week jumped to a 24-year high against the yen, a 37-year peak versus sterling, with the dollar index surging to a more than 20-year high.

The euro leapt as much as 1.2% to a three-week high of $1.0114. It was last up 0.5% at $1.0045.

In other currencies, sterling was last trading at $1.1588, up 0.77% on the day.

The death of Queen Elizabeth on Thursday has heightened an uncertain state of affairs in Britain after the pound hit a 35-year low on the dollar earlier this week. [GBP/]

The Bank of England postponed its September interest rate decision for a week, to Sept. 22, following the queen's death.

Cryptocurrencies advanced as well, with bitcoin up 10.1% at $21,263.

Oil prices rose about 4%, supported by supply cut worries.

Brent crude rose $3.69, or 4.1%, to settle at $92.84 a barrel. U.S. West Texas Intermediate (WTI) crude rose $3.25, or 3.9% to settle at $86.79 a barrel.

Stocks jump as growth shares lead; 2-year U.S. yields hit 14-year highs
 

Related Articles

Take Five: Everything to play for
Take Five: Everything to play for By Reuters - Nov 25, 2022 2

LONDON (Reuters) - The final month of the year is almost here but there's no time yet to slow down, with latest U.S. jobs numbers and euro zone inflation data coming up. And don't...

Dollar edges up in range-bound holiday markets
Dollar edges up in range-bound holiday markets By Reuters - Nov 25, 2022 3

By Saqib Iqbal Ahmed NEW YORK (Reuters) - The dollar edged higher across the board on Friday in a quiet session following the U.S. Thanksgiving holiday but remained near...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email