U.S. stock benchmarks were advancing modestly early Wednesday, but enough to see all three benchmarks trade at or near record-closing territory, ahead of an eagerly awaited inflation report due Thursday.
A decline of the benchmark 10-year Treasury yield, to around its lowest level in three months, as investors appeared to dismiss inflation concerns, also was buoying yield-sensitive assets like technology stocks.
What are major benchmarks doing?
- The Dow Jones Industrial Average DJIA, +0.08% fell 14 points, or less than 0.1%, to 34,591.
- The S&P 500 index SPX, +0.13% was climbing 7 points, or 0.2%, at 4,234, surpassing its May 7 record closing high at 4,232.60.
- The tech-heavy Nasdaq Composite Index COMP, +0.26% rose 70 points, or 0.5%, to around 13,993.
On Tuesday, stocks barely budged. The Dow fell 30.42 points, or 0.1%, to close at 34,599.82, while the S&P 500 rose less than a full point and the Nasdaq Composite edged up 0.3%.
What’s driving the market?
Equities remain stuck in a trading range, with the S&P 500 index and Dow hovering near all-time highs.
“Since May 27, we have managed to gap higher six times, with only one time leading to a higher close on June 4, jobs Friday,” said Michael Kramer, chief executive at Mott Capital Management, in a note.
“The rest of the time, we basically finished the day flat. It suggests that buyers have enough energy to open the market higher, but not enough to finish the job, allowing the sellers to take over. I’m just wondering at what point this pattern breaks and what the result will be,” Kramer wrote.
A May reading of the U.S. consumer-price index due on Thursday morning is expected to be the main event of the week. A hotter-than-expected April CPI reading, which showed prices rose 4.2% year-over-year, briefly rattled markets last month.
Since then, inflation jitters have waned, but the CPI data is expected to provide an important test.
Prices of goods leaving Chinese factories in May rose at their highest pace in nearly 13 years, boosted by a surge in global commodity prices. China’s producer-price index jumped 9.0% from a year ago in May, accelerating from April’s 6.8% increase, the country’s National Bureau of Statistics said Wednesday.
Still, a slide in U.S. yields, with the 10-year Treasury note, hanging around its lowest since March or late February, also was helping to lift tech-related stocks that have been under pressure. Some market participants make the case that fixed-income investors are wagering that inflation will be temporary as a number of members of the Federal Reserve have argued.
Meanwhile, talks between the White House and a group of Republican senators led by West Virginia’s Shelley Moore Capito on an infrastructure package broke down Tuesday, though President Joe Biden is still aiming to reach a deal on the issue with a different group that includes Republican senators.
The U.S. economic calendar is light Wednesday, featuring April wholesale inventories at 10 a.m. Eastern.
Which companies are in focus?
- Target Corp. TGT, +0.49% said Wednesday it wold raise its quarterly dividend by 32.4%, to 90 cents a share from 68 cents. Shares of the discount retailer were down less than 0.1%.
- Marqeta Inc. priced its initial public offering at $27 a share late Tuesday, well above its expected range. Marqeta shares are scheduled to begin trading Wednesday on the Nasdaq under the ticker “MQ.”
- Shares of Clover Health Investments Corp. CLOV, -6.68% were up more than 18% Wednesday, after an 85% pop on Tuesday as it joined the ranks of meme stocks at the center of a speculative frenzy by individual investors.
- Shares of United Parcel Service Inc. UPS, -2.07% were off 1.2% after the package delivery giant laid out financial targets for 2023, and provided long-term ESG targets.
- Campbell Soup Co. CPB, -6.88% shares fell 6.6% after the food company on Wednesday reported earnings and revenue that came in below Wall Street estimates and cut its fiscal 2021 outlook.
How are other assets faring?
- The yield on the 10-year Treasury note TMUBMUSD10Y fell to 1.486%. Yields and bond prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, -0.10%, a measure of the currency against a basket of six major rivals, slipped 0.1%.
- Oil futures CL00 climbed back to a nearly three-year high, with West Texas Intermediate crude for July delivery rising 26 cents, or 0.4%, at $70.31 a barrel. Gold futures GC00 edged up $2.50, or 0.1%, to $1,896.90 an ounce.
- European equities were higher, with the pan-Continental Stoxx Europe 600 SXXP was trading barely unchanged. London’s FTSE 100 UKX were off 0.2%.
- In Asia, the Shanghai Composite SHCOMP closed 0.3% higher, while Hong Kong’s Hang Seng Index HSI ended 0.1% lower and Japan’s Nikkei 225 NIK fell 0.4%.