Stocks Rebound Amid Thin Trading Before Powell: Markets Wrap

Rita Nazareth and Vildana Hajric
·3 min read

(Bloomberg) -- Stocks rebounded in a thin trading session, with traders assessing remarks from central bank officials ahead of Federal Reserve Chair Jerome Powell’s testimony.

Most major groups in the S&P 500 advanced, with retailers and commodity companies among the biggest gainers. Volume was 20% below the average of the past month. Bitcoin came off session lows after earlier tumbling below $30,000 for the first time since January. GameStop Corp. surged after the video-game retailer raised $1.1 billion in share sales. Splunk Inc., an infrastructure software company, soared as private equity firm Silver Lake will invest $1 billion.

A discussion about raising interest rates is still “way off in the future” as the central bank begins debating tapering its bond-buying program, according to New York Fed President John Williams. Meantime, his Cleveland counterpart Loretta Mester said very low rates for a long period of time and unconventional policy tools such as asset purchases can lead to too much risk-taking and financial-stability issues.

Powell’s hearing could shed more light on how much longer the central bank should keep its monetary policy on an emergency footing -- especially after the recent hawkish pivot by Fed officials. His written remarks prepared for the appearance before the House Select Subcommittee at 2 p.m. Washington time show him sticking to the position that the pickup in inflation is transitory.

“These comments sound familiar, but they come against a backdrop of a surprise hawkish shift in the Fed seen last week,” said Fiona Cincotta, senior financial markets analyst at City Index.

On the economic front, data Tuesday showed sales of previously owned U.S. homes fell for a fourth straight month in May as higher prices and lean inventories weighed on buying decisions.

For more market commentary, follow the MLIV blog.

Here are some events to watch this week:

U.S. new home sales, current account balance on WednesdayEIA crude oil inventory report due WednesdayBank of England interest rate decision ThursdayThe Fed releases Thursday the results of stress tests on the largest U.S. banks

These are some of the main moves in financial markets:

Stocks

The S&P 500 rose 0.4% as of 11:25 a.m. New York timeThe Nasdaq 100 rose 0.5%The Dow Jones Industrial Average rose 0.2%The Stoxx Europe 600 rose 0.3%The MSCI World index rose 0.4%

Currencies

The Bloomberg Dollar Spot Index rose 0.2%The euro fell 0.1% to $1.1906The British pound was little changed at $1.3924The Japanese yen fell 0.4% to 110.75 per dollar

Bonds

The yield on 10-year Treasuries declined one basis point to 1.48%Germany’s 10-year yield was little changed at -0.16%Britain’s 10-year yield advanced one basis point to 0.78%

Commodities

West Texas Intermediate crude fell 1% to $72.95 a barrelGold futures fell 0.2% to $1,779.20 an ounce

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