On Monday, volatile trading pushed global indexes higher, for the most part, allowing them to extend the sharp gains recorded in the previous week. Meanwhile, there was also a rise in Treasury yields and oil prices.
Oil records gains
After the rout seen in the previous week, oil finally managed to climb up, as investors were still trying to find a balance between worries of a slowdown in economic growth as opposed to a reduction in Russian oil supply because of the sanctions that have been imposed on the country due to its invasion of Ukraine.
Most people are hoping that oil’s fall from the peak of three months earlier this month could help in bringing down overall inflation worries. This would help in moderating the aggressive monetary policy that the US Federal Reserve has adopted for hiking interest rates in order to combat inflation.
Nonetheless, data released on Monday showed that there was a solid increase in new orders and shipments for capital goods made in the United States in May. This means that the second quarter of the year also recorded substantial spending on equipment by businesses.
Early trading moves
Wall Street indexes were moving between losses and gains in early trading and the Nasdaq Composite remained flat in the late morning session. Market analysts said that after a good rally in the previous week, it was time for some profit-taking.
The Dow Jones Industrial Average recorded a gain of 0.26% to reach 31,583.69, while a 0.33% rise in the S&P 500 saw it reach a value of 3,924.48. There was also a 0.03% gain in the Nasdaq Composite, which took it to a value of 11,611.57.
The STOXX 600 index of European stocks also recorded a gain of 0.61% and a rise of 0.73% was also seen in the MSCI index of global stocks. Global indexes were also strengthening after the lifting of additional COVID-19 curbs in China.
Treasury yields rise
As compared to the previous month, there was a rise in pending home sales, along with orders of durable and capital goods and this led to a rise in Treasury yields. There was a 4.6 basis points increase in the 10-year US Treasury government bond yields, which took them to a value of 3.170%. A gain of 2.2 basis points was also seen in the 2-year Treasury yields and they were close to 3.079%.
There was also a rise in US crude recently by almost 1.54%, as it reached $109.28 a barrel and a 1.38% increase was recorded in Brent, as it reached $114.68. The US dollar was trading lower in foreign exchange as opposed to its competitors, as investors were weighing expectations regarding rate hikes and inflation.
A 0.298% fall in the dollar index was recorded, while the euro rose by 0.5% to trade at a value of $1.0607. The Russian rouble was also weakening in the interbank market, as the country was heading towards its first default not seen in about 100 years.