Stocks Climb After Powell’s Remarks; Dollar Falls: Markets Wrap

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(Bloomberg) — Stocks rose as Federal Reserve Chairman Jerome Powell said the central bank has the tools to curb higher inflation, which is expected to be temporary. Treasuries advanced, while the dollar fell.

The S&P 500 climbed toward another record, with trading volume about 20% below the average of the past 30 days. The Nasdaq 100 outperformed amid a rally in giants such as Apple Inc., Tesla Inc. and Amazon.com Inc. Energy producers and banks retreated.

At a virtual panel Thursday during the Spring meetings of the International Monetary Fund, Powell said: “We would be monitoring inflation expectations very carefully. If we see them moving persistently and materially above levels we’re comfortable with, then we’d react to that.” He also noted that disparate efforts to vaccinate people globally is a risk to progress for the economic rebound. Applications for U.S. state unemployment insurance unexpectedly rose for a second week, underscoring the choppy nature of the labor-market recovery.

“Claims were disappointing. They go to show the recovery will be uneven, and that’s what the Fed has been saying,” noted Fiona Cincotta, senior financial markets analyst at City Index. As Treasury yields move lower, tech stocks are getting “a real boost” again today, she added.

With the S&P 500’s fresh high Wednesday, one technical indicator has the equity benchmark the most overbought since February. The GTI Global Strength Indicator — measuring upward and downward movements of successive closing prices — breached 70 on Tuesday and is now the highest since the index sold off in the middle of that month.

Some key events to watch this week:

China’s consumer and producer prices data are due Friday.

These are some of the main moves in markets:

Stocks

The S&P 500 gained 0.3% as of 1:13 p.m. New York time.The Stoxx Europe 600 Index climbed 0.6%.The MSCI Asia Pacific Index advanced 0.4%.

Currencies

The Bloomberg Dollar Spot Index dipped 0.4%.The euro advanced 0.5% to $1.1925.The Japanese yen appreciated 0.6% to 109.22 per dollar.

Bonds

The yield on two-year Treasuries declined one basis point to 0.15%.The yield on 10-year Treasuries slid four basis points to 1.64%.The yield on 30-year Treasuries fell three basis points to 2.33%.

Commodities

West Texas Intermediate crude declined 0.6% to $59.42 a barrel.Gold climbed 1.1% to $1,756.46 an ounce.

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