A global stock index rose yesterday after recent declines and investors watched for new developments in the US-Iran conflict, while the Japanese yen gained sharply against the US dollar.
It was not immediately clear what prompted the yen move. The currency had retraced over the last month approximately half of its increases made after a rare joint intervention by the US and Japan at the end of July. The yen was last up 0.92 per cent at 158.72 per dollar yesterday.
US Treasury yields eased from multi-year highs. The rise in borrowing costs across major economies had deepened concerns about tighter monetary policy and deteriorating fiscal conditions.
Investors remained focused on Iran, a day after the US launched a barrage of air strikes against Iran, prompting Iranian attacks on US targets in the region, in the most serious escalation in weeks in the conflict.
Oil prices were moderately higher amid fears of further disruption to energy supplies. US crude was up 0.62pc at $90.79 a barrel.
Wall Street stocks were solidly higher on the day after the escalation in the Middle East and the global bond selloff had given September a shaky start.
“We’re seeing a little bit of a relief rally in stocks after the underperformance that came,” with higher yields, said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Investors may be looking for bargains after the recent selling, he said. “The (US) economy itself remains strong, so one of the difficulties in investing in stocks is that a strong economy often leads to higher rates, and you have that tension between good earnings and the potential for the competition that bonds can offer.”
The Dow Jones Industrial Average rose 289.55 points, or 0.55pc, to 53,059.62, the S&P 500 rose 45.54 points, or 0.60pc, to 7,677.30 and the Nasdaq Composite rose 130.03 points, or 0.50pc, to 26,230.25.
MSCI’s gauge of stocks across the globe rose 1.14 points, or 0.10pc, to 1,143.91 after ending lower for the previous three sessions.
The pan-European STOXX 600 index fell 0.21pc.
The yield on the benchmark U.S. 10-year Treasury note shed 0.2 basis point to 4.794pc and was on track to snap its longest streak of daily gains since March. The yield hit an earlier high of 4.818pc, its highest since November 1, 2023.
The yield on the 10-year Japanese government bond held above 3pc for a second straight session after hitting a three-decade high earlier this week.
Traders have recently increased bets on a Federal Reserve interest rate hike.
Ahead of the Fed’s September 15-16 meeting, investors are looking to upcoming US economic data for clues on whether the economy remains strong enough to justify monetary policy tightening. The key monthly US jobs report is due today.
Traders now assign a roughly two-in-three chance that the Fed will deliver a 25-basis-point rate increase this month, up from 37pc a week ago, according to CME Group’s FedWatch tool.
Policy meetings of the European Central Bank and the Bank of Japan will also be closely watched as markets gauge how far major central banks are prepared to tighten policy in response to persistent inflation risks.
Spot gold rose 0.9pc to $4,367.68 an ounce.
&uuid=(email))