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Stocks lose ground while bond yields increase with rates in focus

MSCI's global equity gauge was lower on Friday while bond yields climbed as financiers waited for hints about the future path for interest rates from next week's U.S. Federal Reserve meeting.

In U.S. Treasuries, criteria 10-year yields increased to a. three-week high and were on track for their fifth-straight daily. gain as investors bet that Fed chair Jerome Powell will indicate a. time out in policy relieving after a widely expected 25-basis-point. rate cut next Wednesday.

The U.S. reserve bank is grappling with inflation remaining. stubbornly above its 2% annual target. Information released on Thursday. revealed higher-than-expected U.S. manufacturer prices in November.

Friday's data revealed U.S. import prices barely increased in. November as boosts in food and fuel expenses were partly. balanced out by reductions elsewhere, thanks to a strong dollar.

The marketplace is presuming that Powell cuts next week and after that. stops briefly. I think that's the ideal assumption due to the fact that we're seeing. a stress in between the inflationary data and the labor-market. data, stated Matt Rowe, head of portfolio management and. cross-asset strategies at Nomura Capital Management.

While bets on a December rate cut are nearly unanimous, CME. Group's Fedwatch tool indicates simply 2 cuts in 2025.

They need to take into consideration that in an economy where. inflation is showing itself at this point to be sticky, and. you're really extremely most likely going to get additional financial stimulus,. deregulation, and some element of tariffs coming through, there's. simply no chance you can confirm why you keep cutting in that. circumstances, said Tom Fitzpatrick, head of global market insights. at R.J. O'Brien in New York.

While a rally in chipmaker Broadcom improved Wall. Street, the indexes made no strong relocation in either instructions.

At 2:59 p.m. EST (1959 GMT), the Dow Jones Industrial. Typical fell 61.58 points, or 0.14%, to 43,852.54, the. S&P 500 fell 0.80 points, or 0.01%, to 6,050.55 and the. Nasdaq Composite increased 19.33 points, or 0.10%, to. 19,922.17.

MSCI's gauge of stocks across the globe fell. 2.30 points, or 0.26%, to 866.11. Europe's STOXX 600. index closed down 0.53% earlier, breaking a three-week winning. streak, as financiers sought clarity on Europe's rate policy amid. issues about economic development and a prospective trade war.

The yield on benchmark U.S. 10-year notes increased. 7.5 basis indicate 4.399%, from 4.324% late on Thursday while. the 30-year bond yield increased 6.7 basis points to. 4.615%.

The two-year note yield, which generally moves. with Fed-rate expectations, rose 5.5 basis indicate 4.241%.

In currencies, the dollar considered its greatest weekly gain in a. month on the prospect of slower U.S. rate cuts next year. Sterling fell after a surprise contraction in UK financial. activity while the euro clawed back some current losses in the. wake of the European Central Bank's rate cut on Thursday.

On the day, the dollar index, which measures the. greenback versus a basket of currencies, increased 0.04% to 107.00,. with the euro up 0.26% at $1.0494.

Against the Japanese yen, the dollar enhanced. 0.69% to 153.68, having increased all week as traders downsized. bets on a Bank of Japan rate hike next week.

In energy markets, oil costs settled at a three-week high. on expectations that more sanctions on Russia and Iran could. tighten supplies and that lower U.S. and European rates of interest. might increase fuel demand.

U.S. unrefined settled up 1.8%, or $1.27 at $71.29 a. barrel and Brent settled at $74.49 per barrel, up 1.5%. or $1.08 on the day.

In rare-earth elements, gold fell on the day however was set for a. weekly gain. Spot gold fell 1.05% to $2,653.17 an ounce. U.S. gold futures fell 0.96% to $2,661.70 an ounce.

(source: Reuters)