Market Overview

Stocks Climb, Bonds Drop as Stimulus Hopes Linger

The S&P 500 rose more than 1% after a barrage of overnight tweets from the president supporting $1,200 stimulus checks, $25 billion to hard-hit airlines and $135 billion for small businesses. The benchmark slumped 1.4% Tuesday when Trump abruptly called off aid talks with Democrats. Speaker Nancy Pelosi signaled openness to a standalone airline relief bill in a conversation with Treasury Secretary Steven Mnuchin on Wednesday.

Some investors who’ve watched Democratic challenger Joe Biden’s lead in the polls swell in recent days are now speculating that a victory by him would bring an increase of federal spending to boost the economy. Tech stocks also mostly rose, even after a House panel’s proposal late Tuesday for stricter antitrust rules to curb the power of Apple Inc., Alphabet Inc., Facebook Inc. and Amazon.com Inc. The four tech giants account for more than 15% of the S&P 500. Eli Lilly & Co. gained after advances on its Covid-19 antibody drug.

Volatility picked up this month after Trump contracted the coronavirus and investors were whipsawed by the ups and down of talks on U.S. economic aid. The dollar edged lower versus a basket of its peers before Federal Reserve officials comment later on Wednesday and release minutes from their past policy meeting. Oil fell after U.S. government data showed crude stockpiles increased and gold advanced.

Meanwhile, with Trump now out of the hospital, investors continue to monitor the virus’s impact on economic recoveries around the world. Signs are mounting the virus is returning to the New York area, with infections reaching three-month highs.

The European Commission, meantime, is close to a deal to procure more of the Covid-19 treatment remdesivir from Gilead Sciences Inc.

Stocks
The S&P 500 Index rose 1.3% to 3,404.59 as of 11:54 a.m. New York time.
The Dow Jones Industrial Average jumped 1.6% to 28,204.92, the highest in almost five weeks.
The Nasdaq Composite Index increased 1.4% to 11,312.86.
The Nasdaq 100 Index climbed 1.4% to 11,444.52.
The Stoxx Europe 600 Index fell 0.1% to 365.45, the first retreat in a week and the largest fall in more than a week.

Currencies
The Bloomberg Dollar Spot Index fell 0.1% to 1,172.05.
The euro rose 0.3% to $1.1768.
The Japanese yen depreciated 0.3% to 105.96 per dollar, the weakest in almost four weeks.

Bonds
The yield on 10-year Treasuries increased three basis points to 0.77%.
The yield on 30-year Treasuries climbed three basis points to 1.56%.
Germany’s 10-year yield gained one basis point to -0.49%, the highest in almost three weeks.
Britain’s 10-year yield rose two basis points to 0.304%, the highest in more than five weeks.

Commodities
West Texas Intermediate crude decreased 2.6% to $39.61 a barrel.
Gold strengthened 0.4% to $1,886.27 an ounce.
Copper rose 2.4% to $3.04 a pound, the highest in more than two weeks.

Stocks Climb, Bonds Drop as Stimulus Hopes Linger, Bloomberg, Oct 7

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