(Bloomberg) -- U.S. stocks rose to records and Treasuries declined as corporate tax cuts inched closer to reality after passing another hurdle in the Senate. The dollar extended gains.
The S&P 500 Index headed for the biggest rise in more than two months, as lenders added more than 2 percent to the benchmark after Jerome Powell signaled he isn’t inclined to add to financial regulations if confirmed as Federal Reserve chairman. Treasury yields turned higher and the dollar extended gains after the Senate budget committee advanced the Republican tax bill along party lines. Some assets dipped after North Korea fired a ballistic missile.
In commodities, copper slid the most in two weeks, while West Texas crude traded below $58 a barrel after touching the highest level in more than two years before OPEC and its allies meet this week.
Meanwhile, the Senate tax bill is headed for a marathon debate this week with the aim to hold a floor vote as early as Thursday. House Ways and Means Committee head Kevin Brady said Tuesday the two chambers of Congress will find “common ground” on the legislation.
“This week is about Senate republicans and the ability to get the wavering republican senators on board,” said Quincy Krosby, the chief market strategist at Prudential (LON:PRU) Financial (NYSE:PRU).
Earlier, Powell faced his Senate confirmation hearing in Washington, saying during testimony the case for a December rate hike “is coming together.” In a statement ahead of the meeting, the current member of the board of governors signaled broad support for how the Fed operates, regulates and guides the economy.
Elsewhere, sterling pared losses after a report said the U.K. and European Union reached an agreement-in-principle on settlement ahead of a meeting next week.
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Here are some key events coming up this week:
- The U.S. Senate as soon as this week could debate and vote on tax-cut legislation.
- President Trump will meet with Democratic and Republican congressional leaders Tuesday to discuss a federal spending plan to prevent a partial shutdown and keep the government open after current funding expires Dec. 8.
- In China, the official and Caixin manufacturing PMIs are expected to show mostly steady momentum.
- Japan industrial production is forecast to have rebounded in October, but CPI may show a sharp divergence between headline and core inflation, Bloomberg Intelligence said.
- The second print of third-quarter U.S. GDP on Wednesday may be revised up thanks to consumer spending and inventory accumulation, Bloomberg Intelligence said. The core PCE deflator, the Fed’s preferred gauge of inflation, is due Thursday.
- OPEC meets in Vienna on Thursday.
These are the main moves in markets:
Stocks
- The S&P 500 Index rose 0.9 percent as of 3:10 p.m. New York time.
- The Stoxx Europe 600 Index gained 0.6 percent, the biggest advance in a week.
- Germany’s DAX Index advanced 0.5 percent.
- The MSCI Emerging Market Index climbed 0.3 percent.
Currencies
- The Bloomberg Dollar Spot Index rose 0.1 percent.
- The euro fell 0.3 percent to $1.1866.
- The British pound was little changed at $1.3318.
- The Japanese yen decreased less than 0.1 percent to 111.18 per dollar.
Bonds
- The yield on 10-year Treasuries rose less than one basis point to 2.33 percent.
- Germany’s 10-year yield fell less than one basis point to 0.34 percent.
- Britain’s 10-year yield was little changed at 1.253 percent.
- Japan’s 10-year yield declined less than one basis point to 0.04 percent.
Commodities
- West Texas Intermediate crude fell 0.2 percent to $57.99 a barrel.
- Gold rose 0.1 percent to $1,295.43 an ounce.
- Copper declined 1.9 percent to $3.09 a pound, the lowest in more than a week.
