US stocks close higher as investors shake off recession concerns
Meanwhile, investors continue to keep a close eye on the Federal Reserve
4:05pm: US equities close higher led by tech
US stocks closed higher as investors shook off recession concerns and bid tech shares higher.
Oil prices fell on Monday following their recent surge due to the geopolitical conflict.
Tesla led technology shares higher after the electric-vehicle maker said it wants to split its stock to pay a stock dividend. Tesla popped 7%. Other tech shares, which as a group have been among the worst performers so far this year, gained as well with Microsoft and Amazon higher.
On the day, the Dow jumped 94 points, or 0.27%, to 34,955 and the S&P 500 rose 0.71% to 4,575. The tech-heavy Nasdaq increased 1.31% to 14,354.
12.05 pm: Equities ease following two straight weeks of gains for the Dow and S&P 500
US stocks were lower in noon trading as oil prices fell and parts of the Treasury yield curve inverted, which raised concerns about a possible recession.
At midday, the Dow fell 306 points to 34,556, while the S&P 500 eased 23 points at 4,520 and the tech-heavy Nasdaq slipped 36 points to 14,134.
“Geopolitical risks remain very elevated and the rally in equities over the past two weeks is impressive,” Oanda senior market analyst Edward Moya said.
“The U.S. economy is still in good shape, but buying every stock market dip probably won’t be the attitude for most traders going forward given how hawkish the Fed has turned,” Moya added.
Notable movers included shares of Tesla Inc, which climbed nearly 8% after the electric vehicles maker said it wants to split its stock so it can pay a stock dividend to shareholders.
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9.48am: US shares start mixed on Monday
US stocks started mixed on Monday and the S&P 500 was near flat after two weeks of gains in a row.
The Dow Jones Industrial Average lost around 167 points at 34,693 in early deals in New York.
The broader-based S&P 500 shed around just a point at 4,542.
The tech laden Nasdaq index advanced over 105 points to stand at 14,273.
Oil prices were slipping again on Monday after the recent gush upwards on geopolitical concerns. US benchmark crude (West Texas Intermediate) sank over 7% at US$105.74 a barrel.
6.30am: US shares seen opening flat to lower
US stocks are seen opening flat to lower on Monday as investors consider the possibility of quick interest rate rises in the US as a data-heavy week unfolds, in which worries over inflationary pressures are likely to solidify.
Meanwhile, Russia’s invasion of Ukraine has entered a second month and the developments on the war front continue to have repercussions for markets. News headlines from the region will continue to be in focus.
Futures for the Dow Jones Industrial Average and those for the S&P 500 were both little changed, while contracts for the tech-heavy Nasdaq-100 shed 0.2%.
“A busy week of economic releases will further inform the thinking of central banks, as they grapple with the twin issues of inflation and the speed of interest rate rises,” said Richard Hunter, Head of Markets at interactive investor.
“In the US, inflation numbers and the monthly non-farm payroll data are likely to underline the Federal Reserve’s current focus on the former, with the latter now implying an economy which is nearing full employment. Indeed, having digested the initial interest rate rise, some are now calling for a more aggressive approach from the Fed in tackling soaring inflation. The possibility is now growing for 0.5% hikes at both the May and June meetings,” he added.
Reflecting these concerns US Treasury yields rose quickly, suggesting that markets are expecting the Federal Reserve to raise rates rapidly. The spectre of rising prices and interest rates are, in turn, raising fears that US economic growth may falter.
“From the Fed’s perspective, this remains a difficult balancing act. The economy seems to be on a recovery trajectory, but the Treasury yield curve in the US is getting close to inversion. This implies concerns that there may be an overshoot on hiking rates, which could result in an unwanted Fed-induced recession,” said Hunter.
Oil prices are also expected to be in focus with a coronavirus (COVID-19) lockdown in Shanghai dampening prices. Benchmark Brent crude futures were down 1.9% at $113.16.
“Even so, this does not remove the stark reality of a general imbalance between global supply and demand, and the price remains up by 49% in the year to date,” noted Hunter.