(Bloomberg) – The S&P 500 index erased a decline and climbed higher after soothing comments from Federal Reserve Chairman Jerome Powell on inflation and the prospect of growth encouraged traders to buy dip.
The benchmark stock gauge had fallen as much as 1.8% amid a mess of technology stocks worrying the high-flying stocks had been overvalued. The Nasdaq 100 was wiping out a loss of 3.5% after Powell signaled that the Federal Reserve was not close to withdrawing its support for the economy. Airlines, boarding houses and cyclical stocks utilized at the close of the pandemic barrier outperformed better.
So-called growth stocks have their worst month against value counterparts in more than two decades, as vaccination campaigns pick up pace and bond yields soar close to a one-year high. Bets on faster growth have pushed g between 5- and 30-year interest rates to the highest level in more than six years.
When Powell assured investors of the stimulus, he expressed expectations of returning to a more normal, improved activity later in the year, saying higher bond yields did not reflect economic optimism, not fear of inflation. It helped create a return to the buy-the-dip mentality, which has limited capital outflows in recent months, with investors embarking on a global economic recovery fueled by vaccines and U.S. spending.
“There was something in there for everyone today,” Leo Grohowski, Chief Investment Officer at BNY Mellon Wealth Management, said in a Bloomberg TV interview. “Powell acknowledged a really medium-term run in the economy, but I think some dormant inflation fears were put to rest.”
Elsewhere, equities in Asia were mostly higher as European equities fell. Bitcoin tumbled below $ 50,000 after a battle of volatility highlighted long-standing doubts about the durability of the token rally.
Some important events to see this week:
The EIA report on crude oil was published on Wednesday. Finance ministers and central bankers from the group of 20 meet almost on Friday. US Treasury Secretary Janet Yellen will be among the participants.
These are some of the key features of the markets:
The S&P 500 index rose 0.4% from 1 p.m. 15:25 New York time. The Stoxx Europe 600 index fell 0.4%. MSCI Asia Pacific Index rose 0.1%. The MSCI New Market Index was slightly changed.
The Bloomberg Dollar Spot Index fell 0.1%. The euro fell 0.1% to $ 1.2147. The British pound rose 0.3% to $ 1,411. The Janese yen fell 0.2% to 105.28 per share. Dollar.
The yield on 10-year government bonds fell by a basis point to 1.36%. Germany’s 10-year interest rate jumped by two basis points to -0.32%. British 10-year interest rates rose four basis points to 0.72%.
West Texas Intermediate crude rose 0.3% to $ 61.88 per barrel. Barrel. Gold fell 0.3% to $ 1,804.52 an ounce.
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